Merck Stocks Have a 25% Growth Potential
Updated
Today we will review Merck & Co stocks as I have promised recently. The company announced the launch of the first oral medication against COVID-19 with proven efficiency.
Let’s analyse the chart with the Merck stocks and their upside potential.
When doing analysis it is traditionally better to start from the eldest timeframes to distinguish the existing trend. So, if we look at the monthly timeframe chart of Merck stocks we may find an upward trend that started in March 2009. We may also see a consolidation since January 2020 that lasted until September 2021, that is forming a triangle. This figure acts as a continuation sequence of the trend as the upward breakthrough has already been made. The breakthrough occurred on October 1, when the company announced successful clinical trial results of its anti-COVID-19 pill.
This announcement was made a week before and no other news has been announced concerning this. This triangle provides a potential for Merck stocks to go to the $103.50-104 area. So, it is a potential gain of 25-26% from the current price. Moreover, the gap on October 1 is now acting as a key support level. Nevertheless, technically we may have a retest of the upper triangle margin at the $78.50-$79.30 area. But even if this retest does not happen, as it is not always the case, it is worth to consider adding these stocks to the portfolio.
It should be noted that this technical pattern has been forming for several months and we should expect that the upside scenario would be effective for a while still. It may take 2-3 month, or even more, to reach the mentioned targets. However, such long-term technical patterns usually provide a good profit for those who are not looking for a checkered fortune.Merck has made contracts to deliver its pills not only in the United States, but also with other governments that are currently considering purchasing this new medication.
Let’s analyse the chart with the Merck stocks and their upside potential.
When doing analysis it is traditionally better to start from the eldest timeframes to distinguish the existing trend. So, if we look at the monthly timeframe chart of Merck stocks we may find an upward trend that started in March 2009. We may also see a consolidation since January 2020 that lasted until September 2021, that is forming a triangle. This figure acts as a continuation sequence of the trend as the upward breakthrough has already been made. The breakthrough occurred on October 1, when the company announced successful clinical trial results of its anti-COVID-19 pill.
This announcement was made a week before and no other news has been announced concerning this. This triangle provides a potential for Merck stocks to go to the $103.50-104 area. So, it is a potential gain of 25-26% from the current price. Moreover, the gap on October 1 is now acting as a key support level. Nevertheless, technically we may have a retest of the upper triangle margin at the $78.50-$79.30 area. But even if this retest does not happen, as it is not always the case, it is worth to consider adding these stocks to the portfolio.
It should be noted that this technical pattern has been forming for several months and we should expect that the upside scenario would be effective for a while still. It may take 2-3 month, or even more, to reach the mentioned targets. However, such long-term technical patterns usually provide a good profit for those who are not looking for a checkered fortune.Merck has made contracts to deliver its pills not only in the United States, but also with other governments that are currently considering purchasing this new medication.
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