Gilead Sciences, Inc. (GILD) Speculators Eye the $100 Mark

Gilead Sciences, Inc. (GILD) call buyers anticipate an extended run into triple-digit territory

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Published on Feb 11, 2015 at 11:26 AM
Updated on Jun 24, 2020 at 10:16 AM

Gilead Sciences, Inc. (NASDAQ:GILD) is up 2.1% this morning to trade at $100.43, following encouraging comments surrounding the firm's hepatitis C drug, Sovaldi. As such, call volume has ramped up to 1.4 times the expected intraday pace.

GILD's most active option is the February 100 call, which appears to be seeing some buy-to-open activity. In short, these traders expect the stock to extend its run north of the round-number century mark through next Friday's close, when the front-month contracts expire. The shares haven't closed above $100 since Feb. 3, prior to a guidance-induced bear gap. However, with today's rally, delta on the at-the-money option has jumped to 0.55 from 0.36 at Tuesday's close, signaling an increased probability of an in-the-money finish.

As alluded to, GILD is running higher on positivity surrounding Sovaldi, as the company said it expects usage throughout Europe to increase dramatically this year -- and also expressed optimism that approvals for its combination pill, Harvoni, could be forthcoming. Elsewhere, WellCare Health Plans, Inc. (NYSE:WCG) has reaffirmed its alignment with GILD as its "clinical choice" for hepatitis C treatment.

Technically speaking, Gilead Sciences, Inc. (NASDAQ:GILD) has had a nice run over the previous 12 months. On a year-over-year basis, the shares have advanced 22.5%. However, after bouncing from their 200-day moving average, they're currently testing resistance in the $100 area, which corresponds with last week's downside gap and served as support on several occasions in the latter half of 2014.

Daily Chart of GILD since August 2014 with 200-Day Moving Average


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