After a long slump of near multi-year lows, biotech giant Gilead Sciences Inc. (NASDAQ:$GILD), finally saw a recent breakout. This has led to significant buying interest that has lifted the stock into an uptrend that could possibly lead to 2015’s all-time high.
Gilead’s Past Numbers
Gilead’s road to recovery initially began in 2Q17, having reached a 200-day EMA resistance in June, followed by a July breakout, and successful August testing that has sparked several weeks of strong buying interested supported by higher than average volume. The result was substantial capital off the sidelines while establishing new support in the upper $70 range.
However, a Fibonacci grid examining the two-year downtrend reveals key conflict zones that are inevitably going to hinder the company’s current recovery effort. Specifically, the new uptrend still has not reached the .382 Fibonacci sell-off retracement level at $86.50. Traders are looking for a reversal at that level followed by a shakeout that could offer a low-risk buying opportunity at or below $80.
On the other hand, on-balance volume has been stagnant since April 2016, indicating a major red flag that could have contributed to the decline. Hence, it will take significant buying interest in the coming months for Gilead to reach 2015’s high.
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