4 Trade Ideas for Eli Lilly: Bonus Idea

• Posted by Greg Harmon
• on August 15th, 2022

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

Eli Lilly, $LLY, comes into the week reversing higher out of consolidation following a pullback. The RSI is also moving to the upside with the MACD starting to curl higher but negative. There is resistance at 312.75 and 316.50 then 320 and 324 before 332. Support lower comes at 306.50 and 300.50. Short interest is low under 1%. The stock pays a dividend with an annual yield of 1.27% and began trading ex-dividend Friday. The company is expected to report earnings next on November 1st.

The August options chain shows biggest open interest at the 300 and then 310 put strikes and at 320 on the call side. The September chain is spread from 230 to 320 on the put side, biggest at 280, builds from 300 to a peak at 330 on the call side. October open interest is biggest at 290 and 260 on the put side and at 330 on the call side. The November options have biggest open interest at the 300 and 250 put and then see it spread from 300 to 370 on the call side.

Eli Lilly, Ticker: $LLY

Trade Idea 1: Buy the stock on a move over 309 with a stop at 300.

Trade Idea 2: Buy the stock on a move over 309 and add a September 300/290 Put Spread ($4.00) while selling the October 340 Call ($4.20).

Trade Idea 3: Buy the September/November 330 Call Calendar ($9.20) and sell the October 290 Put ($7.45).

Trade Idea 4: Buy the November 280/310/330 Call Spread Risk Reversal ($2.15).

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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 heading into August Options Expiry, saw equity markets responded to the inflation data with strong moves to the upside and their first intermediate term higher highs since the all-time highs.

Elsewhere look for Gold to consolidate while Crude Oil continues the downtrend. The US Dollar Index continues the pullback in the uptrend while US Treasuries consolidate in their downtrend. The Shanghai Composite looks ready for a short term move higher while Emerging Markets may also be reversing higher.

The Volatility Index looks to continue to move lower in the normal range making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe momentum is starting to get a bit hot so the SPY, IWM and QQQ may be ready for a pause. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

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