MRK Positioned to Move Higher

After trading 6 months in a wide range MRK broke out to the upside in February confirming that it was a re-accumulation phase. In March-April the price was drifting back to low sixties testing support and stopped right at the area where the most of shares changed hands during the previous sideways trend (pink trendlines). At this price the market participants found MRK stocks attractive again and after a month of accumulation MRK broke up and out of a consolidation zone (blue rectangle) on above average volume.

The breakout out of a fulcrum bottom on high cumulative volume is better seen on the volatility adjusted short-term P&F chart (red arrow). It’s possible that MRK entered a new trading range if not a new uptrend. A probable approval of Merck’s Keytruda + chemo in all non-small cell lung cancer patients by May 10 could help move MRK higher. A horizontal count from the accumulation area gives a target around the March high. A pullback to 62.50 would mean that the consolidation continues.

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