GILD closes above its opening price after recovering from early selling pressure
Gilead Sciences Inc. (GILD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GILD ended the week -3.83% lower at 73.34 after losing $0.16 (-0.22%) today, underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.38 lower after the open, Gilead Sciences managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GILD as at May 22, 2020):
Friday's trading range has been $0.78 (1.07%), that's far below the last trading month's daily average range of $2.33. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GILD. Prices continued to consolidate within a tight trading range between 72.71 and 74.09 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Prices are trading close to the key technical resistance level at 74.45 (R1). The share found buyers again today around 72.71 for the third trading day in a row after having found demand at 72.89 in the prior session and at 72.71 two days ago. The last time this happened on May 8th, GILD gained 4.27% on the following trading day.
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 72.30 where further sell stops might get triggered. Further selling could move prices lower should the market test April's nearby low at 71.38.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Gilead Sciences. Out of 295 times, GILD closed higher 55.59% 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 56.27% with an average market move of 1.04%.