MRK closes above its opening price after recovering from early selling pressure
Merck & Company Inc. (MRK) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
MRK finished the week -2.86% lower at 82.65 after gaining $0.68 (0.83%) today, outperforming the Dow Indu. (-0.09%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.56 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MRK as at Feb 14, 2020):
Friday's trading range has been $1.13 (1.37%), that's below the last trading month's daily average range of $1.48. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher 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. After moving lower in the prior session, Merck & managed to close higher but below the previous day's open, forming a bullish Harami Candle.
After having been unable to move lower than 81.45 in the prior session, the share found buyers again around the same price level today at 81.67. The last time this happened on Tuesday, MRK actually lost -2.35% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 86.39.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 81.45 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for Merck &. Out of 74 times, MRK closed higher 56.76% 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 66.22% with an average market move of 0.92%.