Shares of Eli Lilly (LLY - Get Report) looked primed to have an excellent start to the week, gapping up several percent in pre-market trading.

That's not the reality, though, with shares closing lower by 2.6% to $111.07 in Monday afternoon trading. It leaves the stock dangling precariously on a few key levels of support.

Should they give way, it could usher in even more selling. However, if they hold strong, it may be enough to propel Eli Lilly stock higher over several key levels.

Shares initially climbed on positive data from its clinical trials for its selpercatinib treatment. Worth pointing out is that Amgen (AMGN - Get Report) is also down on the day, closing lower by about 2.6%, after also releasing clinical trial data.

Both companies were presenting at the World Conference on Lung Cancer in Barcelona, while Amgen is RealMoney's Stock of the Day. Contributor Bruce Kamich noted that Amgen's decline tests support in the short term, while his focus remains on the bigger picture.

Eli Lilly is in a similar situation.

Eli Lilly is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells LLY? Learn more now.

Trading Eli Lilly Stock

Daily chart of Eli Lilly stock.
Daily chart of Eli Lilly stock.

Over the past few days, Eli Lilly stock has been bubbling right below the 61.8% retracement near $115. This level also rejected LLY stock about a month ago, sending it to $110 support.

Shares are bouncing off Monday's lows, but highlight an important area of support. $110 has buoyed the name over the past few months, but it also has the 50-day moving average and uptrend support (blue line) near the session's low as well.

If these catalysts are strong enough to support LLY stock, it shouldn't be long before we see it retesting $115 and the 61.8% retracement once more.

Over the 61.8% puts a test of $118 on the table. Not only has this level been significant since December, but roughly marks the 50% retracement. A move to this level keeps the uptrend intact as well.

However, if support fails to hold and $110 gives way, it could usher in even more selling pressure. Specifically, a decline down to $104 could be in the cards in that event. That level has supported Eli Lilly stock multiple times over the past 12 months, the most recent of which came in July. It also marks the 52-week low.

The bottom line: If $110 gives way, $104 could be next for Eli Lilly stock. However, if it holds, another test of $115 could be next.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.