Everybody was cheering about the deal the US made with China over the weekend but there was another big announcement this weekend as well. President Trump signed an Executive Order aimed at stopping “Big pharma price gouging.” The EO wants the prices of prescription drugs to come down by 80 or 90%. A big number that I’m not sure can be done with the stroke of a pen.
That sort of action should have been bearish for drug companies like Eli Lilly (LLY). Not the case on a day like Monday. LLY shares shook off the negative news to march higher. After digging down under $700 in the pre-market, the stock took off, adding $21 good for 2.86% at $755.57. The stock had popped up as high as $765.33 on the session.
Moving Averages: Bartosiak starts by examining the stock's moving averages, such as the 50-day and 200-day moving averages. He points out the significance of crossovers and divergences between these averages, which can indicate potential trend changes.
Support and Resistance Levels: Bartosiak identifies key support and resistance levels on the chart. These levels act as barriers that the stock price must breach or hold above, providing traders with critical decision points.
Chart Patterns: He discusses chart patterns like head and shoulders, cup and handle, or flags, and their relevance in predicting future price movements. These patterns can offer valuable insights into potential bullish or bearish trends.
Volume Analysis: He emphasizes the importance of volume analysis in confirming price trends. An increase in trading volume during a breakout or breakdown can validate the significance of a price move.
Dave Bartosiak's technical analysis approach adds depth to our understanding Eli Lilly’s stock chart. By paying attention to moving averages, support and resistance levels, chart patterns, technical indicators, and volume, he equips investors with a comprehensive toolkit for making well-informed decisions in the stock market. Remember, while technical analysis is a valuable tool, it's important to consider other factors like fundamental analysis and market sentiment before making investment choices.
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Eli Lilly and Company (LLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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