The Struggles Of Gilead Sciences

After last week’s hammering of biotech stocks, many have not been able to recover to hit new highs with the overall market.

Previous high flyers such as Agios Pharmaceuticals Inc AGIO and Receptos Inc RCPT have bounced, but still lag the Nasdaq.

Others, such as Bluebird Bio Inc BLUE have actually managed to eek out new highs.

Unfortunately, there are the ones that have not even gotten close to a new high and may be looking to fall further.

Possibly biotech's biggest dog, Gilead, could be one of those stocks.

The company: Gilead Sciences, Inc.

Ticker Symbol: GILD

Sector: Healthcare

Industry: Biotechnology

Gilead Sciences, a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of life threatening diseases in North America, South America, Europe, and the Asia-Pacific.

Related Link: The Top 5 Biotech Gainers of 2014

The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost, and Vitekta for the treatment of human immunodeficiency virus infection in adults; and Sovaldi, Viread, and Hepsera products for the treatment of liver disease.

Review the one-year chart of Gilead with the added notations:

Gilead had been leading the way higher up until the end of November. The stock has been in an overall decline ever since.

During the months of November and December Gilead had found support at $100 multiple times, but a poorly received news announcement sent the stock gapping significantly lower last week.

The stock eventually found support near its key level of $85 and may be marching its way back up to that same $100 level that had provided support before the breakdown.

A test of $100 may send the stock lower again, but a break through that mark could lead to higher prices instead.

Should Gilead fall back to $85, and break that mark, more selling would most likely follow.

The stock closed Tuesday at $95.27.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key.