The old adage goes that "it's a market of stocks, not a stock market," so it stands to reason that we're rounding out our list with a bearish setup. The stock in question is Eli Lilly (LLY), the $60 billion big pharma firm. While Lilly has managed an impressive 31% rally in the last six months, the setup in shares suggests that it's coming to an end.
Lilly is making a double top pattern right now, a setup that's formed by two swing highs that come in at approximately the same price level. The tops are separated by a swing low that's the breakdown level for the pattern. A move below that low triggers the sell signal in shares. For LLY, that sell signal comes on a move below $46.
When and if that move happens, it makes sense to either sell or short shares -- that said, this bearish chart is broken on a move above top 1. Shareholders had better hope that the latter ends up happening to this stock.To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.-- Written by Jonas Elmerraji in Baltimore.
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