Eli Lilly's $15 Billion Buyback Faces Stiff Resistance On The Charts

Eli Lilly and Co LLY is making headlines with its $15 billion share buyback plan and a 15% dividend boost.

Yet, as the Indianapolis-based pharma giant enjoys the success of blockbuster drugs like Mounjaro and Zepbound, its stock is sending mixed technical signals ahead of its next move.

Eli Lilly Stock Chart: Bulls & Bears Face Off

Chart created using Benzinga Pro

Eli Lilly's stock, at $800.13, sits in a precarious zone with its short-term technicals painting a mixed picture:

Bearish Signals Dominate: The stock trades below its eight-day SMA ($811.79), 50-day SMA ($841.23) and 200-day SMA ($838.29), flashing several bearish indicators. In fact, the 50-day SMA and the 200-day SMA appear to be moving towards making a Death Cross. The Moving Average Convergence Divergence (MACD) reading of a negative 5.12 also suggests further bearish momentum.
A Glimmer of Bullish Hope: The 20-day SMA at $784.85 positions the stock as bullish over this timeframe, indicating potential short-term support.
Momentum Concerns: With a Relative Strength Index (RSI) of 47.31, LLY stock hovers in neutral territory, leaving plenty of room for further downside or a recovery rally.

Growth Meets Investor Skepticism

Despite the lukewarm chart signals, Eli Lilly's fundamentals remain strong, driven by surging demand for its diabetes and obesity treatments. CFO Lucas Montarce emphasized the company's commitment to growth through new launches, expanded manufacturing capacity, and ongoing R&D.

While investors welcomed the buyback and dividend news, pushing shares up in after-hours trading on Monday, LLY’s technical outlook suggests it may struggle to maintain upward momentum in the short term.

As the stock navigates this delicate balance, Wall Street will be watching whether Eli Lilly's buyback spree can tip the scales in favor of the bulls.

Read Next: