Don't Ignore This Chart!

Eli Lilly Breaks 18 Month Downtrend

Tom Bowley

Tom Bowley

Chief Market Strategist, EarningsBeats.com

Eli Lilly (LLY) printed an exhaustion gap in November on massive volume, marking a significant bottom and over recent trading days broke a downtrend line that spanned 18 months of action.  Based on this combination and improving momentum, it certainly appears that LLY has seen its worst and has begun to experience much better technical action.  Check out the exhaustion gap on the daily chart:

The short-term picture has certainly improved, but more importantly it appears as if the longer-term downtrend on the weekly chart has broken.  Take a look....

The only downside at this point is that LLY is overbought in the very near-term.  So we can expect a little profit taking.  Outside of that, however, LLY appears poised to sustain a run to the upside.

Happy trading!

Tom

 

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More