Following FDA Approval, Merck Stock Is Ready for Breakout
With new regulatory approval for a pneumonia vaccine, stock traders have an opportunity to go long on drug maker Merck &. Co.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Merck & Co. MRK received FDA approval for their Capvaxive pneumonia vaccine Tuesday. The drug maker is trading higher in the pre-market.
Let's check out the charts and indicators.
In this daily bar chart of MRK below, I can see that prices have traded sideways to higher since January. MRK has been trading around the 50-day moving average line. The slope of the slower-to-react 200-day moving average line is positive and intersects down around $117. The trading volume has been steady the past year. The On-Balance-Volume (OBV) line has moved sideways since the middle of February. The Moving Average Convergence Divergence (MACD) has been bouncing around the zero line for the past three months.
In this weekly Japanese candlestick chart of MRK below, we can see a longer-term uptrend. Prices are trading above the rising 40-week moving average line. The weekly OBV line shows a rise for more than two years before turning sideways in the past five months. The MACD oscillator has been weakening the past few months.
In this daily Point and Figure chart of MRK below, I can see that the software is projecting a potential downside price target in the $111 area. A trade at $134 should refresh the uptrend.
In this weekly Point and Figure chart of MRK, below I used a five-box reversal filter. Here, the software projects the $226 area as a price target.
Bottom line strategy: MRK looks ready to make an upside breakout from the consolidation pattern of the past five months. Traders could go long MRK on strength above $134. Risk to $124 for now.
Employees of TheStreet are prohibited from trading individual securities.