Merck is enjoying a big rally in 2018 but MRK stutters as the new year begins along with the broad market. Those tight standard deviation bands have squeezed out three big up moves over the last few years. The ADX shows that the trend higher is strong like in 2014 and early 2015 but not as high as back then.
The RSI and stochastics are overbot agreeable to a pullback and this helps create the last few weeks of softness. The chart indicators are negatively diverged (red lines) except for the MACD line that remains long and strong. Thus, MRK wants to come up for another higher high in price in this monthly time frame. When that high occurs, the MACD line will likely go neggie d, and the top will be in which is likely a multi-month and multi-year top for Merck say in the February-April window.
The upper band is violated so the middle band at 62.55, and rising, is on the table perhaps this will occur in the March-July time frame. Note the stronger selling volume candle in December after the buying candles in October and November (brown circle). The selling volume exceeds the buying volume firmly indicating that distribution is taking place. The smart money is handing shares off to Joe Bagholder the idiot fool that always shows up to buy as the stock is pumped on television. The money managers love to pump and dump. It's like shooting ducks in a barrel.
MRK is a short going forward but hold-off for a month or two. Price may recover in February, or March, to print matching highs with the MACD line rolling over (neggie d). That will be the time to short. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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