LLY: Ascending Triangle Coils Under 722 — Buy the 706 Dip for a Quick Push to 729

Executive summary

• Bias (next 24 hours): Mildly bullish, range 705–722, with breakout potential toward 728–732 if 720–722 gives way. Ideal plan: buy the dip near 705–707, target 729; alternate: buy the breakout >722 for 735–737.
• Thesis: Post‑capitulation rebound is forming an ascending triangle under 720–722 (50% retrace of 623.8–820.2 and Ichimoku Kijun midpoint). Momentum is improving (MACD up, OBV rising), sellers are exhausting (declining volume into resistance), and higher lows persist (660 → 684 → 698 → 705). Risk remains that the 20‑day mean (≈716.6) caps price; hence prefer a pullback entry.

Data context used

• Current price: 711.68 (Aug 22 close)
• Recent extremes: 623.8 low (Aug 8), 820.2 high (Jul 28)
• Last 21 closes (Jul 25–Aug 22) show capitulation Aug 7–8, then steady grind higher; recent highs: 718.4–719.5.

Multi‑framework technical analysis

1. Price structure and market profile

• Regime shift: A sharp gap‑down on Aug 7 (−14% day, 26M shares) broke the prior 770–820 range. Since Aug 8, price has stair‑stepped higher to the low‑710s.
• Pattern: Ascending triangle under flat resistance 718–722 with rising swing lows: 660 (Aug 13) → 684 (Aug 14) → 698 (Aug 18–19) → 705 (Aug 20–22). This is generally bullish; measured move (height ≈ 722−660=62) projects into the high‑770s on a confirmed breakout (multi‑day implication).
• Gaps: The major downside gap spans ~675–746 (Aug 6 close 746.4 to Aug 7 open 675.7). Price is currently inside the gap. Typical behavior: partial/complete gap‑fill attempts; next gap resistance bands: 720–722 (mid‑gap shelf), 730–737 (prior swing/May 30 close 737.7), 744–746 (gap top/prior close).

2. Support and resistance (confluence)

• R1: 720–722 = 50% retrace of 623.8→820.2 and Ichimoku Kijun midpoint (26‑day mid of high/low); also recent intraday rejection zone (718–719.5)
• R2: 730–737 = late‑May pivot/close 737.7; within the gap body
• R3: 744–746 = gap top (Aug 6 close 746.4)
• S1: 705–707 = rising swing‑low shelf; Friday’s intraday demand
• S2: 698–699 = 38.2% Fib retrace of 623.8→820.2 (≈698.8) and round‑number demand
• S3: 684–686 = Aug 14 close/defended level; below that 660–662 (Aug 13 close/round‑number)

3. Moving averages and mean reversion

• 20‑day SMA (approx): 716.6 (computed from last 20 closes). Price 711.7 is a touch below; mean reversion pull/push suggests chop near this band. A decisive close above 717 would tilt momentum more clearly positive.
• 50‑day SMA (est.): ~770–780 (prices spent months 780–820 pre‑drop). Price is below the 50‑DMA; medium‑term trend still mending.
• 200‑day SMA (est.): low‑700s. Price is near/just above long‑term mean, a typical area for basing after a shock.

Implication: Short‑term mixed (below 20SMA by a hair), medium‑term still corrective, long‑term trend intact. For a 24‑hour swing, the 20SMA is the battleground; buying a dip under it improves odds.

4. Momentum oscillators

• RSI(14) (approx from provided series): ~38–41. Calculation includes the Aug 7 crash within the lookback, keeping RSI sub‑50 despite the rebound. This indicates there’s still room to climb before overbought conditions; it also reflects lingering downside in the lookback rather than current thrust.
• MACD (qualitative): After the Aug 8 low, MACD histogram has likely turned positive with the MACD line curling up toward or just above the signal line, but still below the zero line. That setup is consistent with an early‑stage recovery and favors buy‑the‑dip entries while below major resistance.
• Stochastics (qualitative): Likely mid‑to‑upper range but not embedded; consistent with consolidation under resistance.

Implication: Momentum is improving from depressed levels; no overbought warnings for a 1‑day horizon.

5. Volatility and range statistics

• ATR(14) (approx): mid‑20s (post‑crash expansion, now cooling). Recent daily ranges: ~10–20 points as it tightens into resistance.
• Expected 1‑day movement: ~±25 points from reference suggests an intraday swing band of 686–736 around 711 if volatility re‑expands; more likely 705–730 if the range compression persists.

6. Bollinger Bands (20, 2σ)

• Midline ≈ 716.6; bands likely wide from the shock (upper ~795–805, lower ~630–640). Price sits just under the midline; a reclaim of the midline (close >717) often signals a push toward the upper‑half of the envelope. Compression plus rising lows favors a push up to the 720s.

7. Ichimoku Cloud (daily, approximations)

• Tenkan (9‑period mid): likely around the 670s (mid of 9‑day high ~719 and low ~626). Price above Tenkan = short‑term bullish.
• Kijun (26‑period mid): (High 820.2, Low 623.8) → midpoint ≈ 722.0. This is the key resistance now—the same as the 50% Fib.
• Cloud (Senkou span): likely overhead (given the recent break), with initial cloud resistance above mid‑730s. A first test would be 730–737 if price clears the Kijun.

Implication: Price above Tenkan but below Kijun: a neutral‑to‑bullish “repair” phase; clearing 722 would be a technical milestone.

8. Fibonacci mapping

• From 623.8 low to 820.2 high:
  • 38.2% = ~698.8 (support)
  • 50% = ~722.0 (resistance/trigger)
  • 61.8% = ~745.2 (gap‑top target on breakout) Implication: Current consolidation respects 38.2% as a floor, while 50% is the lid. A daily close >722 opens 730s then 745.

9. Volume/Flow

• Aug 7–8: capitulation volumes (26M/14M) established a durable low zone (625–641). Subsequent up‑legs occurred on above‑average but cooling volume—typical of accumulation after a flush.
• OBV (qualitative): Rising since Aug 8; no distribution signal visible in the provided series.
• Into 718–720: volume has tapered—a common pre‑breakout tell when paired with higher lows.

10. Pattern diagnostics and probabilities (24‑hour)

• Base case (55–60%): Morning dip into 705–707 finds buyers; second attempt probes 719–722. If resistance holds, session ends 710–718.
• Bull case (30–35%): Clean push through 722 with expanding volume; intraday squeeze to 728–732 (R2 vicinity), possibly wick to 735–737.
• Bear case (10–15%): Loss of 705 leads to a test of 699 and, if broader market weak, 692–696. A daily close <698 would postpone the breakout and re‑test 684 next week.

11. Risk management and trade construction (1‑day swing)

• Preferred entry: Limit buy on a pullback to 706. Why: alignment with rising shelf S1, improves reward/risk vs. buying under resistance.
• Profit target (1‑day): 729 (pre‑R2, under 730–737 supply). This captures the common post‑breakout/second‑test extension without needing a full gap‑fill.
• Protective stop (suggested, not requested): 694 (below 698–699 Fib and beneath round‑number 700). Risk ≈ 12 points for an expected 23‑point reward → R:R ≈ 1.9.
• Alternate trigger plan: If price gaps over 722 at the open, use a breakout buy stop 723–724 with a 735–737 target; stop 712–714.

Synthesis and conclusion

• Confluence of supports (705/699), improving momentum, and an ascending triangle into a 50%/Kijun lid favors a tactical long for the next session. The main tactical edge is to buy weakness into 706 rather than chase below 722. Expectation: Retest 720–722; if cleared, extension to 728–732 the same day.
• Key invalidation: A firm daily close below 698 would neutralize the setup and point back to 684 in coming sessions.

Prediction (next 24 hours)

• Likely path: Early pullback to ~706, rebound to 719–722; with moderate odds of a breakout tag of 728–732 before the close if broader tape is supportive.