Watch These Eli Lilly Price Levels as Stock Sets Record High on Trial Results

Eli Lilly (LLY) shares set a record high on Tuesday after announcing that clinical trials of tirzepatide, the medicine used in the company’s diabetes drug Mounjaro and injectable weight loss treatment Zepbound, significantly reduced the risk of developing type 2 diabetes in patients.

Sales of Mounjaro and Zepbound, which studies show are also highly effective in treating heart failure, exceeded Wall Street’s estimates in the drugmaker’s latest quarter, helping to propel its shares more than 18% higher this month.

Let’s now take a closer look at Eli Lilly’s chart and use technical analysis to call out key price levels worth watching.

Broadening Wedge in Play

Eli Lilly shares have oscillated within a broadening wedge since early May last year, helping to establish clearly identifiable support and resistance levels.

Earlier this month, the price found buying interest near the pattern’s lower trendline, with an earnings-driven gap on Aug. 8 accelerating recent bullish momentum in the drugmaker’s stock.

Although share turnover has trended downwards over the past week, Tuesday’s jump occurred on above average volume, pointing to renewed institutional activity.

Eli Lilly shares were up 0.4% at $954.01 in premarket trading Wednesday about two hours before the opening bell. The stock hit an all-time intraday high of $967 on Tuesday.

In upcoming trading sessions, market participants should observe several key price levels on Eli Lilly’s chart.

Support Levels to Watch

Firstly, it’s worth monitoring the $885 area just above the upward sloping 50-day moving average, a location on the chart that will likely find support from a trendline linking a range of similar trading levels from June to August.

A more significant downturn could see the shares revisit lower support at $790, where they may attract buying interest near a horizontal line connecting a period of consolidation in the stock from February to April with recent price action positioned around this month’s swing low.

Resistance Levels to Monitor

The first higher level to watch lies at $950 in close vicinity to the stock’s record close set in mid-July. Interestingly, the shares gave back earlier gains in Tuesday’s trading session to close right around this price, confirming it as a key resistance area.

Further buying could complete a move up to $1,000, where the price would likely face a confluence of resistance from the psychological round number and the broadening wedge pattern’s upper trendline. A near-term test of this area would also likely coincide with the relative strength index (RSI) signaling overbought conditions.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.