Eli Lilly (Thursday’s close US$145.73) traded in a large horizontal range mostly between US$70 and US$90 from mid-2015 to mid-2018 (dashed lines). It had a breakout from this range (A), rose to US$132.12 (B), pulled back to support near ±US$105 (C) and then resumed the up-trend (D).
The stock became overbought earlier this year and has since pulled back to support near its 40-week moving average (40wMA) and the rising trend-line (solid line – E) where it found good support.
Eli Lilly now appears ready to resume the up-trend. Only a sustained decline below US$115 to US$120 would be negative.
Point & Figure measurements provide targets of US$150 and US$160. The large trading range (dashed lines) supports higher targets.
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Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com
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