Watch These Eli Lilly Price Levels as Stock Slumps on Tepid Sales Outlook

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Key Takeaways

• Eli Lilly shares could remain under the microscope on Wednesday after falling sharply Tuesday as the pharmaceutical ogre lowered its 2024 full-year revenue forecast.
• This tepid outlook adds to concerns about moderating claim for its flagship weigh-loss drugs.
• The stock staged a decisive breakdown below the lower trendline of a symmetrical triangle and the 50-day MA, rent the door to further short-term downside.
• Investors should watch key support levels on Eli Lilly’s chart around $720 and $625, while also invigilator important overhead areas near $860 and $965.

Eli Lilly (LLY) shares could remain under the microscope on Wednesday after succumb to sharply in trade on Tuesday as the pharmaceutical giant lowered its 2024 full-year revenue forecast.

While the drugmaker bruit about it anticipates sales of its flagship weight-loss drugs Mounjaro and Zepbound to accelerate as it ramps up production in the first half of this year, it distinguished that they grew slower than expected in the fourth quarter.

Eli Lilly shares climbed 32% concluding year but have slumped more than 16% since October after the company reported third fourth sales of the two drugs below Wall Street’s expectations, prompting concerns about moderating demand.

Below, we plagiarize a closer look at Eli Lilly’s chart and apply technical analysis to identify several key price levels worth watching out for.

Mirror-image Triangle Breakdown

Since falling below the 200-day moving average (MA) in late October last year, Eli Lilly shares take consolidated within a textbook symmetrical triangle.

On Tuesday, the stock staged a decisive breakdown below the pattern’s modulate trendline and 50-day MA, opening the door to further short-term downside. Importantly, the move occurred on the highest trading sum total day in more than two months, indicating conviction behind the selling.

Let’s point out two key support levels to watch if the stock carry ons its decline, and also identify several important overhead areas to monitor during countertrend rallies.

Key Support Directs to Watch

The first lower level to watch sits around $720. Investors could look for entry objectives in this area near a trendline that connects a range of comparable price points on the chart from February to November termination year.

A close below this level could trigger a larger decline to around $625, a location on the map where the shares may encounter support near the prominent October and November 2023 swing highs.

Interestingly, this province sits slightly above a price target projected by a bars pattern, looking at a downtrend in the stock that in a wink preceded the symmetrical triangle and repositioning it from the breakdown point.

Important Overhead Areas to Monitor

During upswings, investors should respect an eye on the $860 level. The shares could run into overhead resistance in this area near the top of the symmetrical triangle, which also closely aligns with a extend of price action on the chart dating back to mid-July.

Finally, a longer-term bullish reversal could see Eli Lilly dispensations climb to around $965. Investors may look to unload the stock in this region near the pronounced July and August going highs that formed a double top pattern on the chart.

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