The Arena
The market is holding, as of today, above the 200 period moving average. Otherwise known as the grand daddy of technical indicators, and viewed by millions each day. Now, only time will tell if price can maintain this bullish indication but if the VIX is any additional indication then from my viewing angle, it might just hold.
Looking at the E-mini Futures, price crossed below the 200 MA back in February and remained there for nearly a month. Analysts are suggesting, en masse I’ll add, that retail investors should sell the rally and wait for a more predictable market environment. However, that could well be the type of rhetoric that leads them to riches and the rest of us to the doldrums of negative returns. In any case, the market looks to have found some modicum of normalcy, so I’ll respond by playing what I see not what I feel, and certainly not what the “experts” suggest.
The Coach
Gilead Sciences has been on and off my radar for years. However, I simply never felt inclined to care much about them. As an options trader the stock never really appealed to me given its propensity for a range. That said, as I write this now I’m slightly disappointed I never capitalized on such price action with an Iron Condor or three.
Regardless, Gilead Sciences seems to be in a potential value area and that may catch more than a few eyes in the weeks ahead. Admittedly, this could be the half-time break before another leg lower. So, consider yourself warned!
Gilead Sciences is currently below its 200 period moving average on both the daily and weekly charts which isn’t typically a good sign. Nevertheless, price has reached a critical point from the very long term weekly chart at which price has shown resilience more than a few times in the past. Dating all the way back to 2014 to be precise. Additionally, GILD hasn’t shown a sustained long term uptrend since I graduated college in 2012.
With those things against it, is it possible for GILD ever move higher? For a more complete overview of what could be ahead for Gilead Sciences here is an interesting analysis from Macroaxis.com.
The Attack
Honestly, I might be the only one considering buying this stock as price looks set to continue its deterioration. Additionally, it wouldn’t even be a long shot to see GILD hit the forty dollar range, this year. However, we should also be aware that the last time price traded this low was just before a solid 30% rally. Here’s hoping for the later.
With price at such an important level skipping this one may be the best play. Then again, if GILD can clear the proverbial bar higher I may just regret never having been involved. If Gilead Sciences looks interesting to you at this price then the two plays below may be worth consideration. If not, the little red “X” near the top of your screen will easily remove it from any further thought process.
Bullish assumption
| Buy To Open | Entry Order | Total Risk |
| 1 Shares | $59.00 Limit order | $59.00 |
| 2 Shares | $57.15 Limit order | $114.30 |
| 3 Shares | $52.00 Limit order | $156.00 |
Bearish assumption
| Sell To Open | Entry Order | Total Credit |
| 1 Shares | $59.00 Limit order | $59.00 |
| 2 Shares | $62.00 Limit order | $124.00 |
| 3 Shares | $68.00 Limit order | $204.00 |
God Bless,
Jeff
