[ad_1]
While the major equity indexes have experienced a choppy Q4, a number of groups within the health care sector have shown strong resilience. Pharmaceuticals and biotechs have generally outperformed the S & P 500 since the end of September, suggesting a potential safe haven play for investors concerned about market instability. Today, we profile one biotechnology company, Gilead Sciences (GILD) , and demonstrate how the long-term trend combined with short-term improvement could lead to much further upside into the year-end. Starting with the weekly chart, we can see that the major low in April was actually just a pause within a much larger uptrend phase that started back in May 2024. A weekly PPO buy signal soon after the May 2024 low ushered in a new accumulation phase that arguably continues through this week. With GILD remaining above the 40-week moving average all through 2025, along with a secondary buy signal from the weekly PPO this week, we see this chart as a long-term uptrend showing no real signs of slowing into the holiday season. On the daily chart, we can focus more on the more recent price action to see how the latest upswing represents a key breakout on improved momentum. Back in March, GILD reached a peak around $120 before dropping to the eventual low in April. In August, the stock retested that same resistance level before finally breaking above in October. GILD then established a secondary resistance level around $124, with the price then retesting the 50-day moving average as support. Just last week, Gilead finally broke above all of these resistance levels, indicating a new accumulation phase for this biotech heavyweight. The Relative Strength Index (RSI) shows how GILD has evolved through a couple different phases since the March 2025 peak. Momentum was bearish in April and May, with the RSI remaining below 60 during that period. From mid-May through mid-October, the RSI stayed in the neutral range between 40 and 60, indicating an equilibrium between up days and down days. The price breakout in October was driven by stronger momentum, confirming a bullish RSI reading that remains in place this week. Strong volume support for the recent price action tells us to believe in the strength of the current accumulation phase. With the accumulation-distribution line trending steadily higher, and the Chaikin Money Flow sitting firmly in positive territory, there are signs that this upswing is being driven by strong institutional support. Investors that are looking to diversify away from technology shares plagued by excessive valuations may be surprised to find that a number of defensive plays like Gilead are showing strong technical profiles. It’s always a good time to own good charts. -David Keller, CMT marketmisbehavior.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
[ad_2]
Source link
