GILD closes below its opening price unable to hold early session gains
Gilead Sciences Inc. (GILD) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
GILD ended Monday at 75.16 tanking $2.67 (-3.43%), significantly underperforming the Nasdaq 100 (0.45%). This is the biggest single-day loss in over two weeks. Trading $1.43 higher after the open, Gilead Sciences was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GILD as at Jun 01, 2020):
Monday's trading range has been $2.52 (3.34%), that's above the last trading month's daily average range of $2.05. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GILD.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 74.38 earlier during the day, the market bounced off the key technical support level at 74.45 (S1). The failure to close below the support could increase that levels importance as support going forward. The share closed back below the 50-day moving average at 76.67. After having been unable to move lower than 74.61 in the previous session, the stock found buyers again around the same price level today at 74.38. The last time this happened on May 29th, GILD actually lost -3.43% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the nearby swing high at 78.12 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 72.38 where further sell stops could get activated. Trading close to April's low at 71.38 we might see further downside momentum if potential sell stops at the level get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Gilead Sciences. Out of 187 times, GILD closed higher 57.75% 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 59.36% with an average market move of 1.53%.