Bullish – LLY – $156.88
Both the S&P 500 and Nasdaq-100 completed an inverted head & shoulders pattern that signals the resumption of a cyclical bullish trend for equities and targets the early Sept highs. This completes a month long consolidation pattern and solidifies US equities as the strongest asset class globally. The breakout is confirmed with the NYSE advance decline and accumulation/distribution lines, providing further support to push higher.
LLY Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang reviewed LLY and REGN’s antibody drug for COVID-19. Both companies have produced what has been effective treatment in clinical trials for early and less severe cases such as President Trump’s case. Despite limited longer term opportunities with production capacity limitations, short term interest is high. With vaccines likely a couple of months from approval, we seek short term opportunities with antibody remedies vs. longer term potential with vaccines. To take advantage of a FDA approval potentially being granted for emergency use within days to week, Tony is buying a Dec $155/$170 Call Vertical @ $5.55 Debit.
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