NFTRH+ Trade Setup; GILD & Biotech Sector

This ‘+’ update is being sent to the entire list because it has macro market elements in it pertaining to the Biotech sector and its leadership vs. Nasdaq 100.

The daily chart of GILD is pretty cut and dry.  A rise above the 200 day moving average would break it above the short-term consolidation/downtrend and the pattern would measure to around 124.


Here is the weekly BTK that we have often followed in weekly reports.  This chart helped us view Biotech’s loss of market leadership in real time as the upward arc broke down.  Then we noted a falling wedge, from which it is breaking to the upside.

btk weekly chart

Taking it further, we have noted the secular bull market in Biotech vs. regular tech.

btk vs. ndxThis looks like a low risk opportunity to be bullish Biotech relative to NDX.  That is different from being nominally bullish Biotech.  But if the market holds up through Santa season the Bio’s could get a bid, especially when tax loss season starts to ease.  There have been a lot of losses for investors in this momentum leader in 2015.

As for GILD, for anyone interested…

Buy Target:  A break above the MA 200 (currently 107.22) or current level (based on the Biotech breakout)

Sell Target:  124 or anywhere lower that profit is considered acceptable.

Stop Loss:  Below SMA 50 (currently 104, conservative), below 102 (more lenient)

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.