Are Gilead Sciences destined for a down trend?
The world wide economy has been devastated in recent months by the affects of COVID 19 and the pandemic all eyes have shifted to companies like Gilead who have been working to produce a cure to help end this virus. There has been many speculation that Gilead have a working cure which has caused a large up tick in their stock price. They have done many trials and test but do not have a working cure ready for humans yet, so what will happen to the stock now? We’ll be looking at some technical details to try and better understand any underlying trends and what this might result in for the stocks future.
Balance of Power
The Balance of power indicator is very simple when the line is above 0 it indicates that buyers have dominance over sellers and when it is below 0 it indicates that sellers have dominance over buyers. The indicator moves between 1 at the very highest and -1 at the very lowest the indicator tracks how strongly price trades to extreme high and low levels. The Reading GILD has is -.65 which strongly indicates sellers are dominating the buyers in the market pointing to the conclusion that GILD shares may move lower.
There is clearly an decrease in Volume highlighted by the vertical bars underneath the chart. Showing that trading activity among investors is decreasing which normally means that there is less interest among investors to buy. With a higher than average trading activity the volatility of GILD is likely to increase as well as a likely increase in the value of the underlying stock.
The Aroon indicator works with two lines a Aroon up line in orange which measures the strength of the uptrend and the Aroon down line in the blue which measures the strength of a down trend these lines will fluctuate day to day moving above and below each other. The Aroon indicator is used to determine the strength of the stocks up or down trend relying on the premise that strong up trends will see higher highs and strong down trends will see lower lows. Readings of above 0 indicate an up tread and readings of below 0 indicate a down trend. To keep it simple if the Aroon Down line crosses above the Aroon up line this indicates a bearish selling signal because it is the start of a new trend the strength of the trend would be determined by its reading above or below 0. If it is closer to 0 it is considered weak if it is closer to 100 the trend is stronger. Looking at GILD chart we can see that the Aroon down line has crossed the Aroon up line indicating a down trend is possibly on its way although it isn’t very strong it could develop into something stronger.