GILD crashes, losing $2.04 (-2.91%) within a single day
Gilead Sciences Inc. (GILD) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
GILD ended the week -5.27% lower at 68.15 after tanking $2.04 (-2.91%) today, but still slightly outperforming the Nasdaq 100 (-3.3%) following today's NFP report. This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on October 31st, GILD actually gained 3.12% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GILD as at Dec 07, 2018):
Friday's trading range has been $2.11 (3.02%), that's slightly above the last trading month's daily average range of $1.81. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GILD.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 67.89 earlier during the day, the share bounced off the key technical support level at 68.06 (S1). The failure to close below the support might increase that levels significance as support going forward. Gilead Sciences closed back below the 20-day moving average at 69.34. After having been unable to move lower than 68.11 in the prior session, the stock found buyers again around the same price level today at 67.89.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 64.27, downside momentum might accelerate should GILD break out to new lows for the year. Further selling could move prices lower should the market test November's close-by low at 65.81.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Gilead Sciences. Out of 106 times, GILD closed higher 56.60% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.43% with an average market move of 1.25%.