Eli Lilly & Co. (LLY) was upgraded to a buy by TheStreet's Quant Ratings service Monday. Let's check out the charts and technical indicators to see if these two investment approaches are pointing in the same direction.
In the daily bar chart of LLY, below, we can see that prices have moved sideways since the beginning of July with buyers coming in around $105 while rallies above $115 plus have failed so far. The price of LLY is holding between the 50-day moving average line and the 200-day moving average line.
Trading volume has been featureless since April but the daily On-Balance-Volume (OBV) line has been flat/steady since April. The line has not budged as far as the eye can see, which could mean that prices are in limbo or that buyers or sellers of LLY are extremely adept at buying or selling without attracting attention.
The Moving Average Convergence Divergence (MACD) oscillator spent much of the time since April below the zero line but now in November it is in a bullish configuration above the line.
In the weekly bar chart of LLY, below, we see a mixed picture. Prices are below the slightly declining 40-week moving average line.
The weekly OBV line has been improving since July and suggests that buyers of LLY have been more aggressive these past months. The weekly MACD oscillator is below the zero line in bearish territory but the indicator has crossed to the upside for a cover shorts buy signal.
Bottom-line strategy: Traders could go long LLY at current levels and on strength above $117 while risking a close below $110. The $140-$150 area is our first price target.