Eli Lilly’s volatile win: What Tuesday’s turnaround means for your portfolio | Don’t ignore this chart!

Eli Lilly & Co (LLY), which topped Wall Street’s earnings and sales expectations on Tuesday, surged 5% from the previous day’s close, but those gains evaporated by midday.

A double hit that surprised some investors, is it time to “overweight” the company with rock star prospects on two of its hottest drugs, Zepbound? ^™ (for weight loss) and text ^™ (for type 2 diabetes)?

Eli Lilly’s full-year 2024 guidance is exactly in line with the Wall Street consensus, but it also predicts demand for a number of its drugs will outstrip supply. So, despite Tuesday’s fluctuations, LLY Best ever—What stocks should I buy now?

Eli Lilly Stock: Rising Star, Shooting Star

Chart 1. Weekly chart of ELI LILLY stock price. Big-picture techniques can sometimes serve as early warning systems that are not apparent in the underlying data.Chart source: StockCharts.com. For educational purposes.

This is where generally optimistic fundamentals and skeptical technicals come into play. Despite strong earnings and guidance, it’s hard to overlook the following:

• A shooting star candlestick pattern that suggests a bearish reversal; Look at that strong price rejection at high prices!
• Last week’s price differenceIn the words of Thomas Bulkowski: chart pattern encyclopedia, 60% chance of being filled If it’s a void of fatigue 8% chance of being filled If the gap is running away (A larger trend that has yet to materialize).
• Relative Strength Index (RSI) and Chaikin Money Flow (CMF) suggest bearish price differentials. CMF stands out much more than the former based on selling pressure below the zero line.

It’s hard to read because LLY’s default view is mostly sunlight and no shadows are visible, while the technology is almost all shadow.

Chart 2. Daily chart of ELI LILLY stock price. There are several potential support levels and entry points. Layering multiple indicators can reveal confluences of levels/ranges, giving you a better opportunity to identify important entry levels.Chart source: StockCharts.com. For educational purposes.

Here are some things to consider:

• The Stochastic Oscillator is within the “overbought” zone, which indicates that the price is somewhat overvalued at current levels.
• The price is well above the upper Bollinger Band.^®; Not only does 85% of price movements occur within the upper and lower bands, but price also tends to revert to or near the middle band even after strong moves (and can stay above or below the middle band for an extended period of time).
• Ichimoku Cloud is shown for reference only. Although the trend is bullish, the support level is well below several other important levels that could provide buying opportunities.

You can use Fibonacci retracement levels as a guide.

• The 32.8% retracement is just below last week’s price gap. It will most likely be filled, and if you want to expand your long position, this will be the highest (and fastest) level to take a long position at. A price alert can be set at $680, above this potential entry point.
• The area between the 50% and 61.8% retracements ($650 and $630 respectively) is where the middle Bollinger Band is located. This is probably the most advantageous entry point for most long positions.
• If the price trades below $615, a level that has been rejected (bullishly) three times since the most recent low and in the past month, the current bullish thesis should be reassessed. It won’t go away completely, but the context and timing of the transaction will have to be redrawn.

Set up technical price alerts

Set up technical alerts These support and resistance levels will help you compare potential entry points with market developments that may influence your decisions.

To access the Technical Alert Workbench, follow these steps:

• Log in to your StockCharts account.
• At the top of the page, click Next. dashboard.
• Click Next. warning Or that new button your notifications panel.
• Select the type of notification you want to create from: Alert type Button in the upper left corner. To create a price alert price alert As warning type.
• Add LLY to the symbol box and set a price trigger.
• Choose how you want to be notified, then save alert button.

conclusion

LLY appeared on StockCharts. new all-time high injection. Stocks put on a volatile reversal after they shattered Wall Street forecasts, with strong fundamentals against technical conditions suggesting caution. Technical patterns such as (weekly) shooting star candlesticks, bearish divergences, and “overbought” conditions that appear on daily charts are all signs of an impending decline. Despite these bearish hints, strategic entry points identified through Fibonacci retracement levels can provide investors with a balanced approach that leverages Eli Lilly’s fundamental strengths while navigating technical uncertainty.

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.