MRK rockets $1.25 (1.58%) after posting strong earnings
Merck & Company Inc. (MRK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MRK finished the month 3.76% higher at 80.24 after surging $1.25 (1.58%) today on high volume, strongly outperforming the Dow Indu. (0.44%) following today's earnings report. Today's close at 80.24 marks the highest recorded closing price since June 10th. 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 Jul 31, 2020):
MRK reported earnings of $1.37 per share before today's market open. With analysts having expected an EPS of $1.14, Merck & Company Inc. topped market expectations by 20.2%. The company's last earnings report was released on April 28, 2020, when Merck & Company Inc. reported earnings of $1.5 per share beating market expectations by 7.1%.
Friday's trading range has been $2.53 (3.13%), that's far above the last trading month's daily average range of $1.50. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MRK.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on May 21st, MRK lost -0.24% on the following trading day.
After trading down to 79.15 earlier during the day, Merck & bounced off the key technical support level at 79.97 (S1). The failure to close below the support could increase that levels significance as support going forward.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Merck &. Out of 434 times, MRK closed higher 56.91% 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 53.23% with an average market move of 0.44%.