Is Gilead Sciences Inc. (GILD) Setting Up for a Long Ahead of Earnings?

Gilead Sciences, Inc. (GILD) is a biopharmaceutical company with operations in North America, Europe, and Asia. The company’s stock is currently trading around $102.00 in a 52 week range of $74.00-$116.83. GILD is has been relatively strong this year with shares rallying more than 8% year to date. GILD is set to report earnings after the bell tomorrow and appears to be setting up well for a long position.

GILD has a relatively strong record on earnings. Over the past 12 quarters the stock has rallied 7 times on earnings day and has rallied from earnings day to the nearest expiration 8 times. On average, shares of GILD move 3.8% on earnings day. This time around market makers are pricing in a move of $4.75 or 4.7% by this Friday’s close. Using this implied move I can calculate an upside target of $106.75 for GILD.

GILD looks relatively strong on a chart as well. The stock is trading well above the Ichimoku Cloud and the future cloud is sloping higher. With a positive technical setup and strong historical performance I will look to get long GILD ahead of the release.

Trade: Buying the GILD May 1st Weekly 106-107 Call Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $106.30

This trade offers better than 2-1 on my money and sets up right at the upside measured move target.

Andrew Keene

Submit a Comment

Your email address will not be published.

Get Our Free Daily Trading Videos

Delivered To your Inbox

By submitting your information you agree to our Terms of Service and our Privacy Policy