MRK dominated by bears dragging the market lower throughout the day
Merck & Company Inc. (MRK) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
MRK finished the week -3.3% lower at 76.72 after tanking $1.65 (-2.11%) today, but still slightly outperforming the Dow Indu. (-2.24%) following today's NFP report. This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MRK as at Dec 07, 2018):
Friday's trading range has been $2.20 (2.81%), that's far above the last trading month's daily average range of $1.46. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MRK.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 76.10 earlier during the day, the stock bounced off the key technical support level at 76.61 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move above 78.37 in the prior session, Merck & ran into sellers again around the same price level today, missing to move higher than 78.30. The last time this happened on Monday, MRK lost -1.27% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 75.82 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Merck &. Out of 110 times, MRK closed higher 51.82% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.09% with an average market move of 0.99%.