BUY, SELL, HOLD (2)

Eli Lilly Stock Looks Good for Call Buyers

The shares could move even higher with a round of analyst upgrades

Nov 20, 2018 at 1:44 PM
facebook X logo linkedin


The shares of pharmaceutical firm Eli Lilly and Co (NYSE:LLY) gapped higher in mid-November on news the company submitted a new drug application for its migraine treatment to the Food and Drug Administration (FDA). This pop brought the shares back above the $111 level, which is 50% above the stock's 2018 closing low of $74.21 from Feb. 8. Plus, LLY is trading north of a trendline connecting lower highs over the past month, which could serve as support going forward.

eli lilly daily chart nov 16

 

A round of well-deserved upgrades could help the shares add to their nearly 35% year-to-date lead, considering nine of 18 analysts still maintain a lukewarm "hold" rating on LLY.

Now appears to be an attractive time to purchase premium on near-term LLY options, too, with its 30-day at-the-money implied volatility of 20.2% in line with the broad market. Lastly, the leverage ratio on our recommended call option is 8.78, and will double in value on an 11.2% gain in the underlying equity.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this LLY commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!