For today's chart we've chosen to take a look at Gilead Sciences Inc. (Nasdaq:GILD) because it recently tested the strength of an influential level of resistance. As you can see from the chart below, the ascending trendlines have created an interesting trading range between $55 and $45. Many traders are anxious to see if the barriers will continue to dominate the price action or if the stock will continue its climb. We expect that bearish traders will be watching for a pullback toward the support of the lower trendline (currently near $45).
Technically speaking, there is little reason to expect the uptrend to reverse until the price closes below the lower trendline. We feel that it is important for traders to be aware of the nearby resistance because it will likely cap the near-term upside. It wouldn't be surprising to see the stock consolidate toward the lower trendline before it continues its trek higher.