GILD trade ideas
GILD can be a long candidate..Hello all
I came across this interesting set up which i wanted to share. Let's take a look at GILD..
Weekly: Strong downtrend. Only thing to see is macd has no momentum now to downside.Ha delta about to go above zero line.
Daily: Its been in downtrend from a year now. Did not follow any rally in indices. So, earnings are coming up this week. There is also a trendline in play here. Macd showing some momentum to upside and hadelta is above zero. Let's see the reaction to earnings and if it breaks above cloud, i don't mind playing it to long side.
There will also be gurus telling you that market is crashing now and tomorrow. But look at the chart and trade what you see. If it is breaking out, its a long. If it is breaking down, it is a short.
Happy trading.
A Potential Entry Point For Gilead Sciences (GILD)Gilead Sciences went down in the last couple of year by almost 50%, and compressed into a 3-year old demand zone. As you can see on the weekly chart, the price has compressed nicely into this zone in the last few weeks. 2 weeks ago there was a very strong price action from the bottom of the zone, in the form of a big engulfing bullish candle. A similar candle can be seen on the monthly chart (the monthly candle of June).
Last week closed with hesitation, and now it's time to wait and see whether the price will retrace a bit down to give a better entry point for new buyers. I drew a line on the weekly chart, but it's basically based on the daily chart, where you can see a trendline, which starts as support, then turns to resistance, and now that it's been breached up, it could serve as support again, should the price come back down and test it.
This is the area of entry - roughly around $66-67, with a stop below the demand zone (around $60) and a potential profit somewhere around $82-85. So a risk of ~10% can potentially yield a reward of ~22-27%.
GILD on track for yearly highsSimple analysis - after a 3 wave pullback lasting near to exactly 2 years after the all time high, GILD is bouncing off support and looks ready to make a nice move north with the fib lines as targets. RSI has also broken out for the first time this year; and more confidence will come on the break of the daily 200 EMA .
Descending WedgeI do not believe we fall below the important support level drawn by the red line. It had shown as vital support in the past and i believe we will see the same here. A further decline does not seem warranted also because of the RSI's divergence to declining prices showing that strength is increasing. After such a decline we should see a breakout to at least Fib 50% from GILDs High to its current price which January Calls look appetizing at the moment as a large move is not expected. Both calls and puts show high OI but this is something I will definitely keep an eye on. GILD is a solid company.
Earnings trade in GILD (Spiked Lizard)This is a neutral trade with no risk to the upside. Its like a straddle with protection to the upside, then selling a ratio spread to move our break even down (Doubling our risk to the downside) The trade is called a spiked lizard by Liz and Jenny. The expected move is around $3 and we have an IVR of 60. With an expected 40% vol crush, lets see how this trade goes.
Our Break even is at 64.93
The trade:
-2 65 Put
+1 66.5 Put
-2 69 Put
+1 71.5 Put
We got $0.11 credit. Max profit is $261.
