Eli Lilly & Co. (LLY) has been a strong upside performer so far this year but some of our indicators now suggest a small pause or correction could be at hand. Let's check out the latest charts and indicators on this stock discussed by Jim Cramer on his Mad Money show Wednesday night.
In the daily bar chart of LLY, below, we can the uptrend beginning in May and a pullback starting earlier this month. Prices are testing the rising 50-day moving average line.
The rising On-Balance-Volume (OBV) line has started to stall this month and the Moving Average Convergence Divergence (MACD) oscillator is pointed down toward the zero line.
In the weekly bar chart of LLY going back three years, below, we can see a two-year sideways consolidation pattern before the upside breakout. Prices are well above the rising 40-week moving average line.
The weekly OBV line is strong and bullish and the MACD has yet to cross to the downside.
In this Point and Figure chart of LLY, below, we have a relatively close by downside price target of $98. I do not consider this a big decline should it happen.
Bottom-line strategy: LLY has made a good run this year and now looks like it will correct a bit. Investors should probably hold but short-term traders should protect profits.