MRK Merck & Co Analysis May 2016 (W,M,Q)
Created on Thursday, 12 May 2016 01:31
Written by Austin Galt
Merck & Co Inc (MRK) is a global healthcare company that offers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. It is listed on the New York Stock Exchange (NYSE) with a market capitalisation of around $150 billion. Price last traded at $54.31.
Let’s begin the analysis with the quarterly chart.
MRK QUARTERLY CHART
We can see after a big downtrend off the all time high of $96.69 set in 2000 price now seems to be turning the corner with a new bull trend at hand.
The Bollinger Bands show price currently finding support around the middle band and after one last dip under that band I favour the uptrend to really get going.
The Fibonacci Fan shows price recently finding support at the 76.4% angle and I now expect price to head on up to the 88.6% angle which will be the bull trend’s next challenge.
The RSI recently made a new high which is bullish and generally looks to be trending up building strength.
The MACD indicator has also been trending up nicely although it is currently in bearish mode.
MRK MONTHLY CHART
Price is back around the middle Bollinger Band and I expect some consolidation before it sets sail for the upper band. I doubt price will get back to the lower band but certainly back to well under the middle band.
I have added Fibonacci retracement levels of the move up from 2009 low to 2015 high and the recent low clipped that 38.2% level which keeps the overall uptrend in a strong position.
The Fibonacci Fan shows price currently trading around the 38.2% angle and I favour prie to dip back under this angle before the uptrend continues.
The RSI is now trending back up while the MACD indicator has just made a bullish crossover which augers well for the future.
MRK WEEKLY CHART
The Bollinger Bands show price has left the upper band and is already back at the middle band. I favour price to get back to around the lower band to set up a higher low.
I have drawn two Fibonacci Fans so let’s run through them.
The bearish fan shows price surging from the 76.4% angle up to the 88.6% angle where resistance came in. This 88.6% angle has provided solid resistance in the past and has now rejected price on three separate occasions. I favour price will get lucky on the fourth occasion and that will see price take off to the upside.
The bullish fan shows the 88.6% angle providing support to set up the first higher low and I favour another test of this angle where the next higher low can form.
I have added Fibonacci retracement levels of the move up from low to recent high. Looking retroactively the first higher low was around eth 76.4% level and I favour this next higher low to clip the 61.8% level which stands at $50.16.
The RSI recently made a very bullish new high while the MACD indicator has been trending up but is now bearish so it won’t be a surprise to see price pull back now.
Summing up, after a correction over the next month or two I expect the uptrend to resume with full effect.
Disclosure – I have no financial interest in MRK.