4 Trade Ideas for Eli Lilly: Bonus Idea

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

Eli Lilly, $LLY, rose up out of a long flat consolidation in July. It continued higher until the middle of August when it paused to digest the move. At the beginning of October it started higher again, finding resistance quickly and pulling back. This marked a channel that has held the stock price ever since. Friday it had moved up to resistance again and looked strong.

The RSI is moving into the bullish zone with the MACD rising and positive. There is resistance at 114 and 116.35. The Measured Move on a break higher is to 130. Support lower comes at 109 and 107.50 then 104.50. Short interest is low at 1.1% and the company is expected to report earnings next on February 13th. The stock just began trading ex-dividend last week.

The December options chain shows biggest open interest at the 105 strike on the put side and 115 strike on the call side. In the January chain open interest is biggest at the 100 put and call. February chain, the first to cover the next earnings report, opens Monday. The April chain shows light open interest.

Eli Lilly, Ticker: $LLY

Trade Idea 1: Buy the stock on a move over 114 with a stop at 109.

Trade Idea 2: Buy the stock on a move over 114 and add a December 110/105 Put Spread (90 cents) as protection. Sell the April 130 Call ($1.15) to pay for the protection.

Trade Idea 3: Buy the April 115/December 120 Call Diagonal ($5.35).

Trade Idea 4: Buy the April 105/120 bullish Risk Reversal ($1.40).