Eli Lilly: Is the Uptrend Fading?
Eli Lilly has been one of the best-performing large-cap stocks in recent years. But now it may be showing signs of stalling.
The first pattern on today’s chart is the bearish price gap on October 30 after earnings and revenue missed estimates. LLY has remained below the gap since, which may suggest that new resistance has been established.
Second, the recent bounce pulled stochastics into overbought territory.
Third, the drugmaker has remained below its 200-day simple moving average (SMA). The 50-day SMA is also nearing a potential “death cross” below its 200-day SMA.
Finally, consider that LLY is up 578 percent in the five-year period ended last month. That’s the fourth-biggest gain in the S&P 500 over the period, according to TradeStation Data. (Nvidia, Tesla and Builders FirstSource have risen more.)
Given the magnitude of its run, many investors could be sitting on significant long-term gains. Could that open the door to profit taking?
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Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
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The first pattern on today’s chart is the bearish price gap on October 30 after earnings and revenue missed estimates. LLY has remained below the gap since, which may suggest that new resistance has been established.
Second, the recent bounce pulled stochastics into overbought territory.
Third, the drugmaker has remained below its 200-day simple moving average (SMA). The 50-day SMA is also nearing a potential “death cross” below its 200-day SMA.
Finally, consider that LLY is up 578 percent in the five-year period ended last month. That’s the fourth-biggest gain in the S&P 500 over the period, according to TradeStation Data. (Nvidia, Tesla and Builders FirstSource have risen more.)
Given the magnitude of its run, many investors could be sitting on significant long-term gains. Could that open the door to profit taking?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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