New York, June 19th (TradersHuddle.com) - Shares of Eli Lilly & Co. (NYSE: LLY) ended the trading session higher by $0.05 or 0.12% from its previous close. Eli Lilly's price action formed what is considered to be a bullish engulfing candle that could very well signal a continuation of trend or reversal of the ongoing weakness.
Eli Lilly (NYSE: LLY) principal activities are to develop, manufacture and market pharmaceutical-based health care solutions. The company specializes in research and development, production and marketing of products for the treatment of diabetes worldwide, such as insulin and insulin delivery devices.. Some of the company's patents include Zyprexa, Prozac, Permax, Humulin, Evista, Humalog, Humatrope, Vancocin, Keflex, Nebcin , Lorabid, Gemzar, Tylan, and Rumensin.
Eli Lilly's recent stock range was formed by a trough where calculated support was defined at $39.25 and by a peak that established the resistance level at $42.17. This range could be used by traders managing their positions.
Traders wanting to establish a position in Eli Lilly or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk, as it shows where the bears were able to push the stock down, before the bulls step in with a bid.
The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short-term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: