MRK closes below its opening price unable to hold early session gains
Merck & Company Inc. (MRK) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
MRK ended the week -2.6% lower at 76.73 after edging higher $0.04 (0.05%) today on low volume, strongly underperforming the Dow Indu. (1.44%). Trading $0.60 higher after the open, the market 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 Jul 10, 2020):
Friday's trading range has been $0.95 (1.24%), that's far below the last trading month's daily average range of $1.59. Weekly volatility is also lower, being slightly below 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, four candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern, the Homing Pigeon and the Southern Doji which are known as bullish patterns and one neutral pattern, the Doji. The last time a Homing Pigeon showed up on May 8th, MRK gained 1.98% on the following trading day.
Prices are trading close to the key technical support level at 76.22 (S1).
Though Merck & is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the close-by swing low at 76.04 where further sell stops might get activated. Further selling could move prices lower should the market test June's nearby low at 73.57.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Cross Pattern" stand out. Its common bullish interpretation has been confirmed for Merck &. Out of 3 times, MRK closed higher 66.67% 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 two trading days, showing a win rate of 100.00% with an average market move of 2.78%.