Leading pharmaceutical giant, Eli Lilly & Co (LLY), has been declining since early July 2020. At that time, LLY stock traded as high as $170.75 a share. Today, the LLY stock is trading lower by $2.06 to $146.40 a share. The stock has now fallen below its important 50 and 200-day moving averages. This puts the stock in a weak technical position on the charts and often leads to more downside. Yesterday, Eli Lilly joined a growing list of pharma companies that are pausing COVID-19 treatment trials. The trial pause came after the FDA issued an “Official Action Indicated” notice that has not been resolved. Eli Lilly stated that it’s working aggressively to address the issues raised in the FDA report.
Traders should now watch the $135.00 level for major chart support. This is a major retrace level on the larger time frame charts. It is also where the stock broke out of a turn trend in late March 2020. This trade level should be defended by the institutional crowd when initially tested. I will be looking for a long side trade in LLY stock at this key support area.
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