MRK breaks below 100-day moving average for the first time since July 12th
Merck & Company Inc. (MRK) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MRK ended Tuesday at 81.69 losing $1.78 (-2.13%) on high volume, strongly underperforming the Dow Indu. (0.28%). Today's close at 81.69 marks the lowest recorded closing price since July 26th. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (MRK as at Sep 10, 2019):
Tuesday's trading range has been $3.54 (4.3%), that's far above the last trading month's daily average range of $1.52. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for MRK.
One bullish candlestick pattern matches today's price action, the Takuri Line.
After trading as low as 78.85 during the day, the share found support at the 200-day moving average at 80.12. The stock closed below the 100-day moving average at 82.19 for the first time since July 12th. When this moving average was crossed below the last time on July 12th, MRK actually gained 1.54% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 85.50.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Merck &. Out of 144 times, MRK closed higher 55.56% 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 63.89% with an average market move of 1.10%.