The Options Market Just Moved Its Own Target

Gilead's (GILD) HIV prevention drug is two injections a year.

That replaced a daily pill, and the market noticed. Their US prevention business grew 87% over the past year while the broader market grew about 14%.

Guidance went from $800 million to $1 billion on that one product, and management called the launch “unprecedented.”

Which brings me to the chart, because I used GILD as a watchlist name on August 11th at $135 and it ran to $150.

Now it's given some of that back.

Shares pulled back 6% over two weeks from $150, which is where a large amount of call open interest was sitting. That's profit-taking, not a breakdown, and the round number happened to be the all-time high from February.

The pullback took shares under the 20-day but found support at $143, which is exactly where the August breakout started. Buyers showed up at the test.

Now watch what November open interest is doing. The $165 strike is seeing significant buying, which means the options market has shifted its target higher.