In last week’s Equity Leaders Weekly, SIA highlighted the Drug Sector as something to keep an eye on as an area of growing opportunity. From a market and sector perspective, the Drug sector has been on the SIA watch list for several months as a relative strength gainer but was not yet a top-performing sector in the SIA Stock Sector report. After yesterday’s close, that has changed as the Drug Sector entered the favored zone of this report and is currently occupying the 5th spot, up 8 spots in the last week, 10 spots in the last month and 22 spots in the last quarter. With this continued strength we are going to highlight Gilead Sciences Inc (GILD) another Drug name exhibiting similar strength up the rankings in today’s report now that we have a positive sector backdrop to the name.
With a market capitalization of $153B and a dividend payout of 2.58%, Gilead Sciences has steadily moved up the rankings in the SIA S&P 500 Index and currently sits in the favored zone at the 94th out of 505 spots in the Report, up 61 spots in the last month and 24 spots in the last quarter indicating a steady build up of strength similar to the Drug Sector ranking. Over the last month alone the shares are up 5.28% and year to date GILD is up 36.43%. GILD initially entered the favored zone earlier this summer on August 8, dipped into the top of the yellow zone briefly last month but held onto its positive SMAX sore and has reasserted itself back in the favored zone.
In looking at the Candlestick Chart of GILD, we see the shares had trended sideways in the 2021 and, for the most part, the 2022 time period followed by a breakout to the upside beginning in September of 2022 at the low $60 area peaking at the $80 level in December 2022. Another sideways consolidation lasting almost 2 years materialized in December 2022 to October 2024 drifting back to the low $60 area going full circle from the September 2022 breakout point. Since October of last year, another breakout occurred and the bulls reasserted themselves as a steady uptrend of higher highs and higher lows transpired until this point reaching the $120 plus territory where we currently sit today as the uptrend still looks to be intact. If the shares pause after this strong one-and-a-half-year move, support can be found at approximately the $110 price point.
Taking a look at the longer term Point and Figure chart on a 2% scale for an investment grade analysis and to identify more precise support and resistance levels, we also can see the shares are in a nice steady uptrend with 4 higher highs materializing in Sept 2024, Feb 2025, Aug of this summer and most recently this month indicating a nice orderly pattern upward. A steady pattern of higher lows also occurred during this period since last summer. If this pattern continues, next resistance is at $131.33 while support can be found at its 3-box reversal of $114.33 and, below that, $109.89. Failure to hold $109.89 would at that point put the current uptrend in jeopardy. Impressively, the shares are exhibiting a bullish Double Top Pattern and has a positive SMAX score of 8 out of 10, exhibiting strong relative strength across all asset classes, not just within its peer group in the S&P 500.
Gilead Sciences develops and markets therapies to treat life-threatening infectious diseases, with the core of its portfolio focused on HIV and hepatitis B and C. The acquisitions of Corus Pharma, Myogen, CV Therapeutics, Arresto Biosciences, and Calistoga have broadened this focus to include pulmonary and cardiovascular diseases and cancer. Gilead's acquisition of Pharmasset brought rights to hepatitis C drug Sovaldi, which is also part of combination drug Harvoni, and the Kite acquisition and pending Forty-Seven acquisition boost Gilead's exposure to cell therapy and noncell therapy in oncology.
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