111.93 -2.86 (-2.55%) Buy

LLY investors herd to book profits while the going is good

13 min read

LILLY ELI & CO was among the worst performers on Friday. It lost -2.55% to close at 111.93. It is currently trading +50% above it's 52 week low of 74.21 and is down only -5% from it's 52 week high.

[Themes containing LLY]

LLY is currently in a up trend. Over the last three months 2 bullish signals in LLY have generated a profit of +0.33% for investors.


LLY has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, LLY outperformed the SP500 index on 52% days.

During the last three months LLY was mostly profitable and delivered on average +0.1% per day. It's best return during this period (of +4.02%) was on Thursday, 4 Oct, 2018. While it's worst loss in the same period (of -4.79%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 8 Oct, 2018. The bullish trend returned +9.03% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 7 Dec, 2018. This bearish trend lost -4.32% of investor capital.

LLY had 9 profitable and 3 loss making months over the last year. LLY was profitable in more months than SP500 index. LLY significantly outperformed SP500 index in Jul 2018, when it returned +15.08% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. LLY had a longer winning streak of profitable months than SP500 index. It went up in 9 straight months (from Mar 2018 to Nov 2018) during which period it delivered +46.54%. It is interesting to note that both LLY and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I finally know what distinguishes man from the other beasts: financial worries.

LLY is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in LLY's volatility from 2 Oct, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that LLY has significant positive skewness in it's return distribution. This indicates that investors can expect LLY to recover from drawdowns quickly. Which makes LLY a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in LLY derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than LLY. Therefore, SP500 must receive a lower allocation than LLY in your portfolio. SP500 index usually has shorter drawdown period than LLY.

On a general note (since you are interested in LLY), two mid cap instruments that deserve special mention are AMD and ABMD. They have significantly outperformed the overall market.

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