GILD broke out of a three-quarters-of-a-year base below 153 resistance, with an upward gap and strong but not overbought momentum, leaving room for further upside; biotech strength and solid-tumor optimism support. High earnings implied volatility may offset bullish gap; post-earnings weakness to 155 is attractive.

We have a company called "Gilead Sciences". They set a new record today. They have increased by 3.3 percent. They have seen a really strong rise. They have a partnership in the field of solid tumors that seems to be generating a lot of optimism.

Similarly. This sector is a little different, and I think it's a mix between healthcare and biotechnology . So, again, if you look at the relative strength of biotechnology over the past several months, and particularly in the last few days, you will find that it is a sector that is showing an ability to withstand some of the selling pressure in the technology sector.

This is why I chose to focus on this name today, and also because when you look at the price action now, we see a significant upward move today, and the stock appears poised to maintain this upward trend.

Well, you know, Marley, this comes as a kind of culmination of a long period, in fact three-quarters of a year, of building this sort of round base, and you could probably describe this as a cup and handle pattern, with a flat handle here on the right side below the 153 resistance level.

Now, we have an upward price gap and that breakout, with a prospect of a rally resulting from that gap with strong momentum. The momentum has not yet reached the overbought or extreme range, which may indicate that there may still be room for further upside .

However, if you watch today’s candle, which is a “shooting” type, you will see a bit of price discovery at those higher levels. The stock has retreated slightly from those high levels.

Another thing to consider here is that the implied volatility ahead of this earnings announcement is already relatively high. In fact, it's as high as it was in the last three earnings announcements for this stock, and that may indicate that some investors are perhaps trying to mitigate this bullish gap a little here with this high implied volatility , Marley.

Yes, Marley. Again , an example of an options deal for November. This deal is a little bolder , as I believe Gilead will continue to maintain an upward price movement . If we see some decline in the price to the 155 level after the earnings announcement, I think that level will be more attractive for acquiring the stock.

So, today's trading example is " Risk Reversal," i.e., selling a put option and buying a call option for November . Sell the put option at 155 and buy the call option at 165. You can do this for a small balance when the stock was trading around 159.

Again , this allows you to participate in the uptrend if we maintain this upward trend that seems to be in its launch phase. And if there is some weakness, as Ben pointed out, the high implied volatility ahead of the announcement is also priced into the November options.

Therefore, I believe that buying the stock below 155 to hold it for the long term is another aspect of this trade example, and I see that you have a good setup here.