Eli Lilly and Company (LLY) is a strong example of the power of the SIA Charts system and its rules-based investment methodology focused on relative strength. This relative strength should not be confused with the basic short-term RSI momentum oscillator, which measures the speed and magnitude of a security's recent price changes to detect overbought or oversold conditions. Instead, the SIA platform performs millions of computations each week by running head-to-head comparisons of over 80,000 investment alternatives, arranging them into a relative strength matrix. SIA Charts’ relative strength rankings help advisors identify opportunities in stocks that are outperforming their peers or index benchmarks on a relative basis. This relative outperformance often reflects improving investor expectations for strong company or sector growth. Several visual tools are available on the platform to monitor relative strength via the SIA Reports tab, which displays a favored zone (green) for the top 25% of constituents, a neutral zone (yellow) for the next 25%, and an unfavored zone (red) for the bottom 25%. With decades of experience and a solid track record of outperformance in the SIA Hypothetical Models, the SIA system consistently favors the green zone alternatives and avoids red zone positions. In the attached SIA matrix position chart for LLY, the stock entered the SIA favored zone of the SIA S&P 100 Index Report in June 2021 and maintained this position, except for a pullback in early 2023. As LLY exited the green zone in late October 2024, the price remained near $900. However, once it entered the red zone, the stock pulled back to $800 and later to $730, currently re-testing this level. This loss of strength was detected by the SIA platform, signaling that it was time to exit around this timeframe and price range for rules-based elite advisors. Viewed through the SIA point-and-figure chart with the SIA matrix position overlay tool engaged, relative underperformance became evident as the stock moved from the yellow zone to red. Support is now at $716.48, with additional support at $611.51 and $511.68 if the $716 level fails. Resistance is seen at $823.01 based on a 3-box reversal, as well as at $839.47, with the level above the all-time high at $964.29.
On the SIA candlestick chart, scaled with weekly candles, the formation of a head-and-shoulders top appears, which is typical of topping formations. A break of the neckline at $730 could further exacerbate the supply situation. Support levels are visible at $730 and $600, while resistance levels are at $800 and $960. This relative weakness is also complemented by a negative SIA SMAX score of 4 out of 10, which measures performance relative to other asset classes, such as broad equity indexes, commodities, currencies, and bonds. Are you ready to transform your investment strategies and stand out in a competitive advisory landscape? SIACharts offers a straightforward, rules-based methodology that empowers advisors with tools designed for maximum impact and minimal disruption. Don’t navigate this transition alone—dedicated account managers are available to ensure you get the most out of your SIACharts experience.
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