Gilead Sciences Surges
Gary S. Morrow | Jan 19, 2021 12:49PM ET
Gilead Sciences Inc (NASDAQ:GILD) is on fire today. Shares are up more than 7% on heavy trade as the stock extends its January gain to 16%. This powerful upgrade inspired (Morgan Stanley (NYSE:MS) goes to ‘Overweight’) move has driven GILD past its Oct/Nov/Dec highs. Big overhead challenges await, but the stock now has layers of support underneath and is set up well for more upside.
After an extremely volatile, and weak, first half of 2020, GILD suffered a damaging blow on Aug. 19. This news-inspired flush sparked a fresh down leg. By late October the stock had printed its lowest weekly close since 2013. November and December were basing months as the stock traced out a divergent low in its daily MACD. Shortly after putting in new 2020 lows on New Year’s Eve, GILD began to rebound. By Jan. 6, shares were putting some distance on a key overhead trendline that links the October-December highs.
GILD is testing a very heavy resistance area near today’s peak. This zone, from $68-$69, includes the post Aug. 19 high (September high), as well as the nasty breakdown gap left after the ‘Arthritis News’ flush. Also in this area is a declining 200-day moving average. Back in Q1/2020 the 200D provided solid support.
We expect a bit of back and fill action before GILD can convincingly take out $70.00. The $65-$64 area (October high/initial January high) as initial support.
Note: We have no position.
You can read Gary S. Morrow's original post here.
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