MRK finds support at 20-day moving average
Merck & Company Inc. (MRK) Technical Analysis Report for Aug 15, 2019 | by Techniquant Editorial Team
MRK ended Thursday at 83.46 edging higher $0.06 (0.07%), slightly underperforming the Dow Indu. (0.39%). Trading $0.33 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MRK as at Aug 15, 2019):
Thursday's trading range has been $0.96 (1.15%), that's far below the last trading month's daily average range of $1.51. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MRK.
Two candlestick patterns are matching today's price action, the Homing Pigeon which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top.
After trading as low as 82.89 during the day, the market found support at the 20-day moving average at 83.36. The last time this happened on August 5th, MRK gained 1.48% on the following trading day. Prices are trading close to the key technical resistance level at 84.52 (R1).
While the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to August's low at 82.16, downside momentum could accelerate should Merck & mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Homing Pigeon" stand out. Its common bullish interpretation has been confirmed for Merck &. Out of 21 times, MRK closed higher 61.90% 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 52.38% with an average market move of 1.26%.