Why Buy LLY?A textbook spike trade... that's why!
Every morning the stock market open gives us opening volatility spikes on the first 30 minute bar. Most are noise but when that rare one comes along that fits my rules AND has multiple matching confluences... it's time to "Strike at the Spike!"
This setup has going for it:
At a 50% Retracement of the recent trend (from November 18 - December 4)
At the top of a Gap Level
At the Volume Profile Point-of-Control for the last year of price action (see below)
With a Spike that my indicator shows >80% ATR Clearance I consider the baseline for a trade; this one is 150% so it definitely fits the rules. I would take a spike if there were only 2 of those matching levels above. Targeting the local high for the first take profit at 834.
Here is the Daily chart for just how key this level is:
Full disclosure: NYSE:LLY is and has been one of my biggest holdings; having owned the stock for over a decade.