A Swine Flu Stock

For a long time, I’ve owned Gilead Sciences (GILD).  I recently sold it but have continued to watch it.  It’s now back in the news because of the swine flu breakout.  In the pre-market, GILD is up about 5%.  Gilead is the maker of Tamiflu and with the swine flu spreading to the United States, some believe there will be an increase in Tamiflu sales.  Gilead is a great company and has been for a while.  I simply sold it because of some potential fundamental changes from the Obama administration that could hurt them in the future.  Since I sold GILD, the stock has been moving sideways.

gild-4-27-09

As you can see from the chart above, GILD will open today at its 200-day moving average around $48.  That might be as high as it goes and I’d still keep this as a neutral.  Not a buy nor a sell.  I wouldn’t run out and buy this just yet based on this news.  But, let’s keep an eye on it over the next couple of days. 

Also, watch the retail drug stores as well.  They could benefit from the swine flu as well.  On the negative side, some are saying the overall economy could suffer because of the swine flu.  I think that’s putting the cart before the horse.  However, it’s news stories like this that can cause an overbought market to go down.

This post published at www.karleggerss.com

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