Rare Gilead Sciences, Inc. (GILD) Call Buyers Emerge Amid Pullback

Sentiment is divided on Gilead Sciences, Inc. (GILD)

May 7, 2015 at 2:10 PM
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Put traders have been bombarding Gilead Sciences, Inc. (NASDAQ:GILD) in recent weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In fact, the stock's 10-day put/call volume ratio of 0.76 ranks just 2 percentage points from a 12-month peak.

Things are markedly different today, despite the fact GILD is down 1.1% at $101.12. Intraday call volume nearly doubles put volume, and a number of short-term calls are seeing potential buy-to-open activity -- including the weekly 5/8 102, May 100, and June 105 strikes. In other words, the buyers believe GILD will bounce back above the various levels by the respective expiration dates.

Sentiment among the brokerage crowd is similarly positive. Thirteen of 17 analysts consider GILD a "buy" or better, and its average 12-month price target of $119.13 stands at an 18% premium to current trading levels.

Technically speaking, Gilead Sciences, Inc. (NASDAQ:GILD) has been consolidating in the $96-$108 range for the better part of 2015. However, should the stock bounce from its 50-week moving average -- located at $99.33 -- a capitulation among the aforementioned option bears could result in tailwinds.

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