Every now and then, Mr. Market serves up a chart so clean it almost feels wrong not to take a look. That’s exactly what we’re seeing with Gilead Sciences (GILD) right now.

The Pattern: An Uptrending Channel

Gilead’s been climbing a staircase — an uptrending channel formed by two parallel, upward-sloping lines formed by a series of higher highs and higher lows:

  • Lower rail = support. Price tags it, then bounces.
  • Upper rail = resistance. Rallies tend to stall there.

Traders love this because it creates repeatable “buy low, sell high” zones. Right now, GILD just ricocheted off the lower rail — a textbook entry — while the upper rail near $120 sits as the logical target.

Why the Timing Matters

Here’s the quick math:

  • Recent price: $112.97
  • Target (upper rail): $120
  • Potential swing: $7.03

Buying shares outright could capture that move for a potential 6.2% return. But if you’re willing to accept higher risk for magnified upside, options offer another path.

Using a Call Option for Leverage

Example setup:

  • Buy the $115 call expiring October 17, 2025, $2.89 per share ($289 per contract).
  • If GILD hits $120 by expiration, the option’s intrinsic value is roughly $5.00 ($500 per contract).
  • Net profit = $211 ($500 value – $289 cost) — a 73% gain on risked capital.

Compare that with buying 100 shares: a $703 gain on an $11,297 outlay (6.2%). Same $7.03 move, very different ROI. That’s options leverage.

The Risk Side

Leverage cuts both ways. If GILD fails to get above $115 by expiration, the call can expire worthless and your entire $289 premium is gone. These are high-risk, high-reward tools — best used in small size with strict risk management.

Bottom Line

The bounce off Gilead’s lower channel rail sets up a classic swing trade. Swapping stock for a call option can supercharge the payoff if price pushes toward the upper rail — but it also magnifies the downside if the move fizzles.

This is not a recommendation — it’s just an educational walk-through of combining a clear technical pattern with options leverage to potentially juice returns. Do your own research, size smart, and trade only what fits your style.

Good trading!
Greg Patrick

P.S. As exciting as this trade setup could be, there’s another way to play it that’s much safer and generates instant income at the same time. In short, instead of buying a call option here, you could sell one through a “buy-write” covered call trade. This allows you to take advantage of GILD’s bounce off the lower rail of its uptrending channel while collecting high, steady income along the way. These are the kinds of income-focused option trades I make regularly in our premium service, Dividends & Income Select. Click here to learn more about how it works.