October 26 Chart of the Day - Merck
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Merck & Co (MRK) reported higher-than-expected third-quarter results on strong demand for its COVID-19 treatment, primarily in Japan, and raised its sales forecast for the drug.
It was about a year ago the company's stock price catapulted to new $119.65 all time highs (ATH) that had previously been set over 20 years ago.
On the monthly chart we can see since breaking the previous $96.69 ATH price has revisited it once already and may want to do so again.
From a price action technical analysis perspective we can see on the weekly chart that the ATH set a year ago also respected a nearly 20 year trend line before drifting back to the downside.
Using Fibonacci sequencing techniques we can see how price has consistently made higher highs and higher lows since 2009 to form what some would call a "channel."
Technically speaking, setting new ATHs again as well as testing the lower trend channel are both in play but experience tells us that whatever price decides to do it's never a straight shot.
Regardless, we've identified levels of interest in both directions from which both investors and traders can develop a plan from.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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