Eli Lilly Surges 3.45% on Groundbreaking Weight Loss Trial Data: Is This the Next Big Catalyst?

Summary
• Eli Lilly’s stock jumps 3.45% to $1,062.975 amid blockbuster phase 3 trial results for retatrutide
• Retatrutide achieves 28% average weight loss, outperforming existing drugs like Zepbound
• Leveraged ETFs ELIL and LLYX surge 6.8% and 6.68%, respectively, as momentum builds

Shares of Eli Lilly (LLY) are trading at a 3.45% intraday gain, surging past $1,060 amid a wave of optimism driven by its next-generation weight loss drug, retatrutide. The stock’s sharp rally follows the release of phase 3 trial data showing unprecedented efficacy in obesity treatment, with investors rotating capital into defensive pharma names as tech stocks falter. With the stock nearing its 52-week high of $1,111.99, the question now is whether this momentum can sustain or if it’s a short-term spike.

Retatrutide’s Triple Agonist Breakthrough Ignites Investor Frenzy
Eli Lilly’s 3.45% intraday surge is directly tied to the release of phase 3 trial data for retatrutide, a triple agonist drug that activates GLP-1, GIP, and glucagon pathways. The trial demonstrated a 28% average weight loss over 68 weeks at the highest dose, far exceeding the 20% efficacy of its existing blockbuster, Zepbound. This result positions retatrutide as a potential market leader in the $100 billion obesity drug sector. The stock’s rally also reflects a broader shift in capital from volatile tech stocks to defensive pharma names, as investors seek stability in a market wary of rising interest rates.

Pharma Sector Rally as LLY Outpaces Peers
The pharmaceutical sector is experiencing a modest rally, with Eli Lilly outperforming its peers. Novo Nordisk (NVO), the sector’s leader, is up 0.34% on the day, while broader pharma indices show mixed momentum. The sector’s strength is driven by investor appetite for defensive stocks amid tech sector volatility. Lilly’s triple agonist pipeline and retatrutide’s phase 3 success have amplified its premium valuation, creating a divergence from peers focused on traditional growth models.

Options and ETFs to Capitalize on LLY’s Bullish Momentum
• MACD: 18.89 (bullish divergence from signal line 31.78)
• RSI: 42.79 (oversold territory, suggesting potential rebound)
• Bollinger Bands: Current price at $1,062.98, above the middle band ($1,038.11), indicating bullish momentum
• 200D MA: $814.60 (far below current price, signaling long-term strength)

Eli Lilly’s technicals suggest a continuation of its bullish trend, with key support at $1,020 and resistance near $1,111.99. The stock’s surge has also lifted leveraged ETFs like Direxion Daily LLY Bull 2X Shares (ELIL) and Defiance Daily Target 2X Long LLY ETF (LLYX), which are up 6.8% and 6.68%, respectively. These ETFs offer amplified exposure for aggressive bulls.

Top Options Picks:
• LLY20251219C1060 (Call, Strike: $1,060, Expiry: 12/19):
- IV: 31.54% (moderate volatility)
- Leverage Ratio: 60.58% (high amplification)
- Delta: 0.545 (moderate sensitivity to price moves)
- Theta: -5.588 (significant time decay)
- Gamma: 0.0101 (responsive to price swings)
- Turnover: $2.54M (high liquidity)
This contract offers a balance of leverage and liquidity, ideal for capitalizing on a potential breakout above $1,060. A 5% upside scenario (to $1,115.62) would yield a payoff of $55.62 per share.

• LLY20251219C1065 (Call, Strike: $1,065, Expiry: 12/19):
- IV: 31.49% (moderate volatility)
- Leverage Ratio: 70.88% (high amplification)
- Delta: 0.494 (moderate sensitivity)
- Theta: -5.227 (significant time decay)
- Gamma: 0.0102 (responsive to price swings)
- Turnover: $450K (reasonable liquidity)
This option provides higher leverage for a slightly out-of-the-money strike, appealing to traders expecting a sharp move. A 5% upside would generate a $50.62 payoff per share.

Trading Outlook: Aggressive bulls should consider LLY20251219C1060 for a near-term breakout play, while LLY20251219C1065 offers amplified exposure for a more speculative bet. Both contracts benefit from high gamma and moderate IV, making them responsive to Lilly’s next move.

Backtest Eli Lilly Stock Performance
The backtest of LLY's performance following a 3% intraday increase from 2022 to now shows a significant strategy return of 290.00%, with a benchmark return of 48.07% and an excess return of 241.94%. The strategy achieved a CAGR of 41.65% and had a maximum drawdown of 0.00%, indicating a strong performance and risk management during the period.

Position for LLY’s Next Leg Higher: Key Levels and Catalysts
Eli Lilly’s 3.45% surge is a clear signal of its dominance in the obesity drug market, driven by retatrutide’s phase 3 success and a broader shift into defensive assets. The stock’s proximity to its 52-week high and strong technicals suggest a continuation of its bullish trend, particularly if the upcoming seven phase 3 readouts in 2026 confirm retatrutide’s potential. Investors should monitor the $1,060 support level and the $1,111.99 resistance. Meanwhile, sector leader Novo Nordisk (NVO) remains a key benchmark, currently up 0.34%. For those seeking amplified exposure, leveraged ETFs like ELIL and LLYX offer a high-conviction play on Lilly’s momentum. Action Step: Buy LLY20251219C1060 into a breakout above $1,060 for a potential 5% upside.