GILD Stock: Bullish Developments
(NASDAQ:GILD) stock has just taken a serious turn, and the timing could not have been any better." width="300" height="200" srcset="https://i2.wp.com/investorsbuz.com/wp-content/uploads/2017/06/GILD-Stock-300x200-Small.jpg?resize=300%2C200 300w, https://i2.wp.com/investorsbuz.com/wp-content/uploads/2017/06/GILD-Stock-300x200-Small.jpg?w=720 720w" sizes="(max-width: 300px) 100vw, 300px" />
BUZ INVEStORS Gilead Stock Surges Wow, Gilead Sciences, Inc. (NASDAQ:GILD) stock has just taken a serious turn, and the timing could not have been any better. In a June 14 publication titled “Gilead Stock Needs to Conquer These Hurdles,” I focused on GILD stock and outlined the developments that I would have needed to see in order to justify holding a bullish view on this investment.
In recent days, GILD stock has staged an advance, and a number of the hurdles I identified have been surpassed. It’s as if someone read my publication and decided they would attempt to paint the chart in a bullish manner. This is of course just rhetoric, nonsense, and I do not believe it for one second, but it’s fun to spin a few conspiracy theories on occasion, especially when the timing is so well-placed.
Gilead Stock Surges
The truth of the matter is that Gilead is a drug maker and this sector has been put under a lot of scrutiny following a tweet by Hillary Clinton, where she vowed to curb the predatory pricing polices that certain drug makers employed in order to boost their bottom lines. President Donald Trump made a similar pledge, and a dark shadow was cast on this sector as a result.
This event will cause money sitting on the sidelines to return to this lagging sector, fueling an advance. It seems as though investors are front running this announcement, which is causing the recent buying binge in this sector. The following Gilead stock chart illustrates this binge buying that has occurred over the past few days and the implications it carries.
A bearish trend in GILD stock was defined using two key metrics, the downtrend line and the 200-day moving average.
The downtrend line is a simple tool used to define a bearish trend. This downtrend line is created by connecting the significant peaks that stopped the stock price from advancing beyond it. This downtrend line was created omitting the peak that was created in April 2016, because GILD stock gapped lower shortly after it broke above the peak. This method has created a fitted downtrend line with multiple points of contact, creating a trend line that is quite significant.
Similar indications are being suggested by the 200-day moving average, which is created by averaging the closing price over the last 200 days and plotting that value over the price chart in order to provide a smoothed price trend. The 200-day moving average is a metric that is used to define whether an investment is healthy and trading in a bull market, or unhealthy and trading in a bear market. As a result, I have a tendency to refer to this moving average as a dividing line.
In December 2015, Gilead stock broke below this moving average and it failed to regain its footing ever since. Until now. As I write, Gilead shares have appreciated to the tune of 9.95% in three days. In this process, GILD stock has managed to break above the downtrend line and the 200-day moving average.