Biggest Gainer at the Opening Bell: Eli Lilly

Upside break out or top?

Trader 3

On Tuesday morning, Eli Lilly (LLY), a developer and producer of pharmaceuticals gapped up over 10%.  

From a technical point of view, on a daily chart, Eli Lilly's stock price has been declining inside of a descending broadening wedge pattern that began to form after price topped out at around $165 on April 24th. The RSI was holding below a bearish trend line since April 24th This morning, the RSI broke above a falling trend line and is currently above 60. Price has reached a critical point within the descending broadening wedge pattern, even though the last few months have shown bearish sentiment, the massive gap up and RSI spike are very bullish signals. If price can hold above the $152.00 support then we will most likely see a retest of the all-time high at $165.00. If price can break $165.00 then price would likely continue advancing making new highs. If price cannot hold above the $152.00 support level, then price will probably fall back towards $144.00 and maybe even lower to touch the lower trend line.       

Source: GAIN Capital, TradingView

More from Equities

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account