LLY slides to lowest close since April 14th
Eli Lilly and Company (LLY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, LLY ended the week -5.07% lower at 151.16 after losing $1.12 (-0.74%) today, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 151.16 marks the lowest recorded closing price since April 14th. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (LLY as at May 22, 2020):
Friday's trading range has been $2.39 (1.57%), that's far below the last trading month's daily average range of $4.14. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LLY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Unable to break through the key technical resistance level at 152.55 (R1), the stock closed below it after spiking up to 152.56 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 149.72 in the previous session, Eli Lilly found buyers again around the same price level today at 150.17. The last time this happened on May 11th, LLY actually lost -0.52% on the following trading day.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 149.72 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Eli Lilly. Out of 21 times, LLY closed higher 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 61.90% with an average market move of 1.12%.