For the past three years, Eli Lilly and Co. traded within a horizontal trading range between $32.50 and $38 and then in a higher range between $35 and $39. This price action produced a bullish technical pattern known as a Duplex Horizontal (dashed lines). The recent rise to $42.03 (A) signalled the breakout from this formation and the start of a new major up-leg. Only a decline below about $37.50 would be negative.
Point & Figure measurements provide targets of $44 and $49. The large Duplex Horizontal pattern (dashed lines) supports higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. ( www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.com
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