u s stock focus no signs of bottoming for gilead sciences 2688432017

Technical Outlook on Gilead Sciences (GILD)

(Click to enlarge charts)

Key technical elements

• From its high of 123.37 printed on 24 June 2015, GILD has tumbled by 47 % to a recent low of 65.38 on 09 Feb 2017.  However, its long-term primary uptrend in place since June 1994 remains intact as it continues to hold above its key long-term support at 56.96 which also confluences with the 61.8% Fibonacci retracement of the rally from July 2010 low to its current all-time high level of 123.37 (see weekly chart).
• However, the multi-month downtrend in place since 24 June 2015 high remains intact and GILD is showing no signs of any bullish reversal. It continues to evolve within a descending channel.
• Medium-term downside momentum of price action remains intact as the daily RSI oscillator remains bearish below its resistances and still has room to manoeuvre to the downside before it reaches an extreme oversold level.
• The key medium-term resistance stands at 71.68 which is defined by the recent 08 March 2017 gapped down and the former range support from 02 November to 30 December 2016.
• Relative strength analysis is advocating for further potential underperformance of GILD against its peers in the same industry (Biotechnology). In turn, the Biotechnology sector continues to underperform the benchmark S&P 500.

Key levels (1 to 3 months)

Pivot (key resistance): 71.68

Supports: 64.74 & 61.70

Next resistance: 81.90

Conclusion

As long as the 71.68 pivotal resistance is not surpassed, GILD is likely to see a further potential down move to target its next supports at 64.74 and 61.70.

However, a clearance above 71.68 may put the bears on hold to trigger a corrective rally to test the next resistance at 81.90 (lower boundary of the descending channel in place since 24 June 2015 high).

Charts are from eSignal

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