Eli Lilly & Co. (LLY): Cancer Breakthrough Could Mean Big Gains for This Pharma Giant

Necitumumab was originally developed by Bristol-Myers Squibb Co (NYSE:BMY) and ImClone Systems, which Lilly acquired in 2008; however, analysts didn’t see much promise for the drug. Thanks to the positive results in the Phase III study, all that has changed.

For traders, the move today in Eli Lilly & Co. (NYSE:LLY) shares could be just the beginning of a longer-term uptrend for the pharmaceutical giant. Shares have been on the rise since late June, and in July, the stock broke above both its short-term, 50-day moving average, as well as its long-term, 200-day moving average.

LLY Chart

I suspect that the upside in Eli Lilly & Co. (NYSE:LLY) shares will continue in the back half of 2013, so traders should think about building positions here in anticipation of a 10%-15% move higher by year’s end.

Recommended Trade Setup:

— Buy LLY at the market price
— Set stop-loss at $51.20, approximately 8% below the current price
— Set initial price target at $64 for a potential 15% gain by year-end

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