During the Lightning Round segment of Mad Money Monday evening Jim Cramer offered callers his opinion of stocks they are interested in. One caller inquired about Gilead Sciences (GILD) . "Gilead had some good news and the stock went down. That means sell," Cramer replied.
Our last review was Oct. 29 where we wrote that, "I am not the person to ask about the fundamentals driving GILD but the charts tell me there is 'trouble in River City'."
Let's check out the charts and indicators again.
In this updated daily bar chart of GILD, below, we can see that the shares have been weak since early May. The slopes of both the 50-day moving average line and the 200-day moving average line are negative. Prices made a low in late October but the On-Balance-Volume (OBV) line is still pointed down and the Moving Average Convergence Divergence (MACD) oscillator is still below the zero line. Not what I call a bullish picture.
In this weekly bar chart of GILD, below, we can see a weak-looking chart. Prices have been in a downtrend and have broken the extensive 2019 lows.
The weekly OBV line has been bearish since April and tells us that sellers of GILD have been more aggressive. The MACD oscillator has narrowed and is close to a cover shorts buy signal.
In this daily Point and Figure chart of GILD, below, we can see a potential upside price target of $66.
In this weekly close only Point and Figure chart of GILD, below, we can see a potential bearish target of $42 being projected.
Bottom-line strategy: GILD might manage a rally to $66 or so but the longer-term Point and Figure chart suggests further declines in the months ahead. I will pass on GILD until there are signs of base building.