Don't Ignore This Chart!

Eli Lilly Breaks 18 Month Downtrend

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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 at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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