Eli Lilly and Company (NYSE:LLY) shares continue to move higher on Wednesday. They reversed and rallied after dropping to a support level. If the rally continues, there is a good chance it will end or stall around $985. This is why Eli Lilly is the Stock of the Day.

Some people believe the market is random. They think it isn't possible to time the market. These people are wrong.

What happened in the past can affect what happens in the future.

For example, it wasn't a coincidence that the shares found support around the $865 level. As you can see in the chart below, this level had previously been a resistance level, and resistance levels can convert into support.

This is a common occurrence in the financial markets.

Some of the people who sold their shares around $865 came to regret doing so when the stock rallied after. A number of these people decided to buy back their shares.

But they also decided they would only do so if they could get them at the same price they were sold for. So, when Eli Lilly dropped back to this level, they placed buy orders. These orders created support.

Seller's remorse can turn resistance levels into support.

If the stock continues to rally, there is a good chance it hits resistance around $985. This level was support, and in the financial markets support levels can turn into resistance levels.

Buyer's remorse can convert support levels into resistance.

Some of the people who purchased shares around $985 decided they had made a mistake when the shares dropped below this level. A number of them decided to sell their shares at break-even if they could eventually.

This means that if the stock returns to $985, they will place sell orders. If there are enough of these orders, they will create resistance at the same level that previously supported.

To be a successful trader, it is important to understand market psychology. This understanding will lead to profits.

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