LLY breaks below Thursday's low
Eli Lilly and Company (LLY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, LLY finished the month -8.46% lower at 150.29 after losing $2.71 (-1.77%) today on high volume, significantly underperforming the S&P 500 (0.77%). Today's close at 150.29 marks the lowest recorded closing price since June 15th. Closing below Thursday's low at 150.45, the market confirmed its breakout through the prior session low after trading up to $1.71 below it intraday.
Daily Candlestick Chart (LLY as at Jul 31, 2020):
Friday's trading range has been $4.60 (3.0%), that's slightly above the last trading month's daily average range of $3.78. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LLY.
One bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed below the 100-day moving average at 152.45 for the first time since June 15th. When this moving average was crossed below the last time on June 11th, LLY lost -0.37% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 163.07.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Eli Lilly. Out of 117 times, LLY closed higher 53.85% 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 75.21% with an average market move of 2.46%.