4 Trade Ideas For Eli Lilly: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Eli Lilly, $LLY, started higher in February and broke above resistance in July. That accelerated the move to consolidation in August. It has held over support since then, making higher highs along the way. Now it is moving higher up off of support and moving over the 20 day SMA.

The RSI is rising and over the mid line with the MACD about to cross up and near a move to positive. There is room to the top of the Bollinger Bands above, and resistance at 116 and 119. Support lower comes at 111.75 then 107.50 then 104.25. The stock pays a dividend and begins trading ex-dividend February 14th. The company is expected to report next on February 13th.

The January options chain has biggest open interest at the 110 strike. The February chain shows the 120 call as the biggest open interest. In March the open interest is just starting to build.

Eli Lilly, Ticker: $LLY

Trade Idea 1: Buy the stock on a move over 116 with a stop at 112.75.

Trade Idea 2: Buy the stock on a move over 116 and add a January 114/111 ($1.40) while selling the February 125 Calls (92 cents) to help fund it.

Trade Idea 3: Buy the January/February 120 Call Calendar ($1.60)

Trade Idea 4: Buy the February 105/120 bull Risk Reversal (84 cents)

After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with one trading day left in the year sees equity markets putting in a strong case for a reversal this week. They are still a long way from confirming a bottom though and not just a bear flag build.

Elsewhere look for Gold to continue in its uptrend while Crude Oil may possibly pause in the downtrend. The US Dollar Index continues to consolidate sideways while US Treasuries pause in their uptrend. The Shanghai Composite and Emerging Markets continue to show an easier path to the downside.

Volatility looks to remain elevated keeping the bias lower for the equity index ETF’s SPY, IWM and QQQ. Their charts showed a strong bounce during the week but not enough to do anything to alter the current downtrends. Very short term uptrends are beginning, but it is too soon to declare a bottom. Use this information as you prepare for the coming week and trad’em well.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.