They say the trend is your friend until it ends…….Well I like to say that I’m going to continue to follow a pattern until is stops working! I have a bullish pattern of higher highs and lows in Gilead Sciences (GILD, $80.56, off $0.11) where every time it pulls back into key symmetry support within the uptrend, I look for another buy entry.
I have seen another buy entry recently in this one, that still has higher targets to watch for. Note that on the daily chart the recent decline in GILD was only similar to some other prior declines. The key price support cluster came in at the $76.32 – $77.54 area. Price held and has already fired off some buy triggers. As long as price continues to hold above the 1/27 low at $77.59, I’m going to trade this one for higher prices. Target # 1 is $86.25. Target 2 is $88.61.
An options strategy…..I usually do a debit vertical spread. GILD has Extended Weekly’s. Earnings are expected next week, Tuesday Feb 4th. If you think earnings will be all right, look to the regular Feb options, and perhaps the purchase of the 77.50 – 85 call vertical for ~$3.45 could do well.