Click here to listen to previous episodes.
About Chen Lin
Author "What is Chen Buying? What is Chen Selling?" Chen grew $5,400 to $2.3 million in 10 years. Learn More
Gilead Sciences, Inc. Is A Weak Stock That Keeps Getting Weaker
From Corey Rosenbloom: “Strong Stocks Keep Getting Stronger while Weak Stocks Keep Getting Weaker.” Gilead Sciences, Inc. (NASDAQ:GILD) reminds us of this core trading principle right now, after breaking powerfully under a key support level with positive divergences, overruling any reversal signal to keep the persistent downtrend in motion.
This stock is nearing a point where it has lost half of its value since mid-2015.
And yes, this weak stock keeps getting weaker. Here’s the Weekly Chart:
As traders we’re always assessing the probability of a trend continuing or reversing.
Retracement or pullback strategies are designed to give us profits from a trend in motion staying in motion.
However, we have to be on guard for reversal signals such as divergences or price achieving a key target level.
Positive divergences set in motion a possible reversal up away from the $70.00 per share support target.
However, buyers failed to rally and reverse this stock higher off the $70.00 level, keeping the big downtrend in motion.
Buyers got trapped with the breakdown as a rapid “stop-loss liquidation” event triggered losses for buyers.
Short-sellers were emboldened, as they have been repeatedly with each retracement higher to the falling 20 week EMA – a core strategy of pro-trend retracement tactics.
Let GILD be an example of how risky it can be to trade AGAINST a strong trend in motion.
Weak Stocks Get Weaker.
The Gilead Sciences, Inc. (NASDAQ:GILD) was trading at $65.46 per share on Thursday morning, down $1.37 (-2.05%). Year-to-date, GILD has declined -8.59%, versus a 2.98% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of AfraidToTrade.com.
You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
Powered by WPeMatico