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Point & Go Figure: Eli Lilly


Don't worry, I'm not leaving.


Market Overview:

The broad bullish percent indicators for the NYSE and the Nasdaq Composite are negative for the first time since last October. Meanwhile, both the NYSE Percent Above 50-day Moving Average Indicator and the Nasdaq Percent Above 50-day Moving Average Indicator continue to move lower, both below the 30% level where they typically form a short-term trading low.

The High-Low Indices for the NYSE and Nasdaq are both in Os and also nearing levels from which significant relief bounces can occur.

With the overall context now negative, however, any move higher should be short-lived and in my opinion provide an opportunity for longer-term sales or hedges. Expect negative surprises, not positive surprises in other words.

Charts of Interest:
I've been looking for stocks that may be washed out and therefore either places to hide, or areas to turn to for trades as outperformers with less risk during market bounces. One area I keep coming back to is large cap pharma.

Eli Lilly (LLY) is certainly beaten down in PnF terms. The chart below shows the stock hasn't given a buy signal since March. But so far the stock is holding above what has now become spread triple bottom lows and multi-year support.
Eli Lily (LLY)
(Chart courtesy

Meanwhile, LLY has recently registered important DeMark "buy" signals on both daily and monthly scales, while the weekly scale shows a buy setup. In my opinion this makes LLY an attractive, lower-risk candidate for purchases during weakness and as a trading vehicle when the market relieves oversold conditions that may occur during this period of overall equity high-risk.

Eli Lilly (LLY)
(Chart courtesy Thomson Financial)



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No positions in stocks mentioned.

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