GILD dominated by bears dragging the market lower throughout the day
Gilead Sciences Inc. (GILD) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GILD finished Wednesday at 69.00 tanking $1.88 (-2.65%), significantly underperforming the Nasdaq 100 (0.26%). Today's close at 69.00 marks the lowest recorded closing price since March 16th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 70.47, the stock confirmed its breakout through the prior session low after trading up to $1.49 below it intraday.
Daily Candlestick Chart (GILD as at Aug 05, 2020):
Wednesday's trading range has been $1.83 (2.59%), that's slightly above the last trading month's daily average range of $1.64. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GILD.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 68.52 (S1).
Crossing below the lower Bollinger Band for the first time since July 31st, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 74.54 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on July 28th, GILD lost -0.98% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 68.52 where further sell stops might get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Gilead Sciences. Out of 74 times, GILD closed higher 63.51% 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 66.22% with an average market move of 2.19%.