The Balm in Gilead is Working

• Posted by Greg Harmon
• on September 14th, 2015

Gilead has a long history dating back to biblical times and before. It is the name of the mountainous region east of the Jordan River in Jordan. It was the birthplace of the prophet Elijah and where King David fled during the Absalom rebellion. It looks kind of barren. It is mentioned several times in the Bible where there are references to a Balm in Gilead. Perhaps this is the genesis of the name for Gilead Sciences ($GILD), the biotech company.

Whether that is the case or not, it seems that Gilead stock price has been given a Balm for its summer pains. The chart below shows the stock price break higher out of a symmetrical triangle in May and run higher exceeding the target at 122 by $1.37 before topping. The pullback with the market gave some a great opportunity in the mid eighties for a technical double bottom.

But since then it has consolidated between 100.50 and 109.50. Both were important levels in the past. 100.50 was the pivot in the triangle and support a couple of times before that. 109.50 was the start of the triangle and a consolidation point after the breakout.

On a very short term basis the stock is now testing the top of that range with the move higher last week. The RSI is over the mid line and rising with a MACD that crossed up. Both support more upside. Watch for a move over 109.50 to participate.

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