Gilead Sciences (NASDAQ 🙂 is expected to report its first quarter 2020 earnings today, Thursday, April 30, after its closing. The biopharmaceutical company Forest City, CA is expected to report $ 1.59 EPS, about 10% less than the $ 1.76 EPS issued for the company, at $ 5.37 billion in revenue.
Gilead & # 39; s CFO, Andrew Dickenson, warned in February that the first quarter would be disappointing. But, after yesterday at the Oval Office by Dr. Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, that his agency had conducted a clinical trial of the biotech's experimental inhibitory antiviral agent as a potential treatment for COVID-19, and according to the Washington Post found it "it recovery of hospital patients accelerated, but only had a marginal benefit in mortality, "markets viewed the statement as a positive sign.
The stock rose as much as 8% higher and closed 5.7% at $ 83.14. So, will investors really care about today's earnings report? Probably not. Here's the proof.
The stock has floated above $ 60 since December 2018. It broke out on February 24 after Bloomberg reported that a senior World Health Organization official said the company's experimental drug is the best bet to find a cure for the spread of the new coronavirus. all over the world. "
The 20% jump since that outbreak is entirely due to brake desivir. In addition, investors' expectations for Gilead's fortunes and the momentum of his shares are now entirely based on the hope of brake desivir. And for now, it seems that investors want to hold onto hope.
Over the course of just over two months, the price returned to its highest level since January 2018. Note that the $ 85 level has been a recurring stress point since February 2014. The last monthly close above that level was in May 2016 A monthly close above that level would suggest a new era for Gilead's stock, with the $ 85 high becoming a floor from a ceiling of nearly three years.
Trading Strategies
Conservative traders should wait for a lock above $ 90, a resistance level since May 2016, and then wait for a return movement to find support above the new supposed support of $ 85.
Moderate traders may buy after an outbreak with a monthly close, even below $ 90, but are waiting for a withdrawal to buy the dip.
Aggressive traders can go long with a monthly close of over $ 85 depending on their trading plan.
Trade Example
Entry: $ 85
Stop-Loss: $ 80
Risk: $ 5
Target: $ 100
Reward: $ 15
Risk: reward ratio: 1: 3
Note: A trade sample is a device for conveying key components of a coherent trade plan. Not every transaction can win. No trade is suitable for all traders. Feel free to change the entry points, stop loss and goal according to your temperament and capita. But you have to act according to your preset plan, otherwise your trading results – good or bad – are meaningless.
