Through The Fly's Eyes: Merck
A Technical View
Goldman Sachs upgraded Merck (MRK) to Neutral from Sell this morning. The shares have filled the major bearish gap down from September 2004 and are now trading in a horizontal channel ranging from $42-$46.50.
On a longer daily chart (more clearly on weekly chart) there is a potential bullish flag (not valid until there is a breakout above $46.50) that has potential to the $58 area. The set-up, especially since it has gone largely unnoticed, seems classically bullish. The only potential negative now is that the shares will be turned back at $46.50 after making such a strong move over the last 8 months after the double bottom at the $26 area (exhaustion risk).
Resistance levels to watch now are at $46.50 (critical), $47.00, $47.75, $48.75, $49.60, $50.38. Support is at $46.31, $45.99, $45.29 (10-day MA), $44.26 (50-day MA), $43.63, $42.96.