Eli Lilly Bounces 3.66% After 7.79% Drop, Technical Indicators Signal Potential Bullish Reversal at Fibonacci 61.8% Level

Eli Lilly (LLY) has closed the most recent session with a 3.66% gain, reaching ¥1,058.18, following a sharp 7.79% decline the prior day. This two-day price action suggests a potential bullish reversal pattern, such as a Hammer or Morning Star, as the current close surpasses the midpoint of the previous session’s range (¥1,005.83–¥1,075). Key support levels appear near ¥1,005.83 and ¥993.58, while resistance is likely at ¥1,075 and ¥1,114, derived from recent swing highs and lows.
Moving Average Theory indicates a mixed signal. The 50-day MA (calculated from recent data) sits around ¥990–¥1,010, while the 200-day MA hovers near ¥830–¥850. The current price above the 50-day MA but below the 200-day MA suggests a short-term bullish trend amid a longer-term uptrend. However, the 100-day MA (~¥980) may act as a near-term resistance. Confluence occurs if the price sustains above the 50-day MA, reinforcing the short-term bullish bias.
MACD & KDJ Indicators highlight diverging momentum signals. The MACD line crossed above the signal line recently, suggesting a potential bullish crossover. However, the KDJ (Stochastic) shows the RSI near overbought territory (~70), with %K and %D lines indicating a possible pullback. A bearish divergence in the KDJ could warn of overbought exhaustion, though the MACD’s bullish signal may delay immediate reversal.
Bollinger Bands reflect elevated volatility, with the current price near the upper band (~¥1,060–¥1,070), consistent with recent volatility expansion. A contraction phase is evident in early January, where bands narrowed below ¥1,000, suggesting a potential breakout. The price’s position near the upper band implies continued bullish momentum unless a breakdown occurs.
Volume-Price Relationship reveals a surge in volume during the prior session’s 7.79% drop (¥7.98 billion) versus a lower volume (¥5.14 billion) in the subsequent 3.66% rebound. This negative divergence may question the sustainability of the recent rally. However, the rebound’s volume remains robust, indicating strong buyer participation.
Relative Strength Index (RSI) currently sits near 70, signaling overbought conditions. While this warns of a potential pullback, the RSI has not yet formed a bearish divergence with price, suggesting the uptrend may persist. A close below 60 would indicate weakening momentum.
Fibonacci Retracement levels drawn between the January high (~¥1,114) and February low (~¥993.58) identify key levels at 38.2% (~¥1,040), 50% (~¥1,054), and 61.8% (~¥1,068). The current price (~¥1,058) aligns with the 61.8% level, acting as a critical resistance zone. A breakout above this level may target ¥1,075, while a failure could trigger a retest of the 50% level (~¥1,054).
Confluence between candlestick reversal, MACD bullish crossover, and Fibonacci 61.8% level supports a short-term bullish outlook, though RSI overbought warnings and volume divergence caution against overextending long positions. A breakdown below ¥1,005.83 would invalidate the bullish case, favoring a short-term consolidation or correction.