MERCK & CO. INC. is setting up nicely for a breakout.

MERCK & CO. INC. (NYSE:MRK) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NYSE:MRK.

Technical Analysis Observations

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, MRK scores 9 out of 10 in our technical rating. Both in the recent history as in the last year, MRK has proven to be a steady performer, scoring decent points in every aspect analyzed.

• The short term is neutral, but the long term trend is still positive. Not much to worry about for now.
• When comparing the yearly performance of all stocks, we notice that MRK is one of the better performing stocks in the market, outperforming 92% of all stocks. We also observe that the gains produced by MRK over the past year are nicely spread over this period.
• MRK is one of the better performing stocks in the Pharmaceuticals industry, it outperforms 80% of 257 stocks in the same industry.
• MRK is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so MRK slightly outperforms the market at the moment.

How do we evaluate the setup for NYSE:MRK?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:MRK currently has a 8 as setup rating:

MRK has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 109.93, a Stop Loss order could be placed below this zone.

How to trade NYSE:MRK?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

Of course, there are many ways to trade or not trade NYSE:MRK and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout analyzer.