Gilead Sciences, Inc. (NASDAQ: GILD)

Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of life threatening diseases in North America, South America, Europe, and the Asia-Pacific. The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost, and Vitekta for the treatment of HIV infection in adults; and Sovaldi, Viread, and Hepsera products for the treatment of liver disease. It also offers Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa, a tablet used for the treatment of chronic angina; Lexiscan/Rapiscan injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging; Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, an oral antiviral capsule for the treatment and prevention of influenza A and B.

Take a look at the 1-year chart of Gilead (Nasdaq: GILD) below with my added notations:

1-year chart of Gilead (Nasdaq: GILD)

GILD has been trending consistently higher since April, and during that time the stock has formed a clear trendline of support (blue). In addition, the stock has recently created at 52-week high resistance level at $110 (red). At some point GILD is going to have to break one of those two levels, and yesterday the stock barely held support after breaching it intraday.

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The Tale of the Tape: GILD is trading between a trendline of support and a 52-week high resistance. A long trade could be made at the trendline, with a stop placed below that level, or on a break above $110. A short trade could be made on a break below the trendline.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach