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

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.