Chart of the Week: Eli Lilly
Hey everyone. Happy Wednesday. It’s time for our chart of the week, and we’re gonna be focusing on big pharmaceutical company, Eli Lilly; LLY is the symbol. Stock’s been up really strong lately. Let’s take a look at the chart.
So from the lows in August, you can see that the stock has been in a nice uptrend. Higher highs, higher lows – that is our textbook pattern of an uptrend. You can see that clearly in place right here.
I know it looks like we broke this trend line a little bit in late September, rebounded in early October, and have been coming up nicely here. Came back, retested that. We had a huge run in early November; most of November, actually. Came back down with lower volume.
What you like to see is this – is that you see that higher turnover when the stock is rising. And you see lower turnover when the stock is coming down. That’s our textbook definition of a strong uptrend with good volume trends.
Came back down a little bit here. Didn’t quite make it to the 50 day moving average down over here, or down to the trend line. But we bounced over here and we’re kind of just moving around sideways as a matter of fact. Kind of in a range here.
Some people have talked about this being a double top up there at $1,100. Not sure yet. If it breaks this box to the downside and we break down, then certainly that double top will be troublesome.
Money flow has been real good for the past couple of months. Relative strength real good. And we’re not overbought right now. We burned off of that overbought reading from a couple of months ago, and now we’re just kind of stable here.
Earnings coming out later on in the month of January, so we’ll see how that works.
I do like Eli Lilly. Maybe for a run up to $1,200 or so. It’s about $1,080 right now. There’s rumors they’ve been looking at some companies to acquire to help enhance their revenues and earnings. That could happen sooner rather than later.
For now, I do like Eli Lilly breaking through that $1,100 barrier eventually. If we get back down to this trend line over here, let’s call it about $1,050, that would be a great opportunity to scoop up some stock right there.
Otherwise if you want to buy some options, probably go out to February or March on Lilly. Now obviously with a $1,000 stock, that’s going to be a little bit pricey, but listen, that’s just the way it is. Maybe the $1,100, $1,110 call for February would probably be the way to go, so take a look at that.
That’s Eli Lilly.
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