Today, we’re opening a new bullish trade on Gilead Sciences (GILD). The market has been more defensive than many investors would have expected and, while we don’t think the energy group will continue leading the charge, biotech and health care still look relatively good.

Earlier in October, GILD completed an attractive bullish divergence with a price target near $110 in the near term.

GILD is still in a position in which it is trying to recover from the extreme bearish pressure that hit when high-priced drugs found themselves in the crosshairs of political candidates, but it is holding its own and continues to move higher in its up-trending channel. We anticipate that this trend will continue.

Recent headwinds from political candidates are still a risk, but the selling in GILD appears to be overdone, as guidance has been raised and forex fluctuations remain under control. We like a long position here but recommend keeping this trade on a tight leash if news from China sours in the short term.

“Buy to open” the GILD November 100 Calls for $4.90 or less.

We will keep you informed when we decide to take profits.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.