MRKCL trade ideas
$MRK see if we can move off these SMAsHolding some 1/21 $80' calls from $0.25, solid start but could use a nice pop into the end of the week...
Triple BottomPossible stop under lowest bottom or where you see support.
Possible stop under green dashed line somewhere but keeping in mind market makers do go stop hunting on occasion at the most inopportune times.
Suspicious looking top but a triple bottom can show the bulls made a stand at that level.
Price is at resistance possibly caused from the bottom of previous gap. Another gap or 2 overhead.
The alligator indicator is tangled which can signify consolidation.
No recommendation.
$MRK breakout or failure?Been consolidating here for several days, either we start to fill this gap, or fail back down to the low $70's. Going to 1/14/22 and trying 10 $80 calls at $0.34, with one $75 put to cover
MRK has a lot of headline potential from hereHeadline Potential
Merck has three drugs currently under priority FDA review, one of them a Covid-19 drug:
Molnupiravir, an antiviral for Covid-19 which has received a positive opinion from the advisory board and which Merck's CEO says should work against any variant
Vaxneuvance, a pneumococcal vaccine
Lynparza, a breast cancer drug
Merck also continues to make strong headway with Keytruda, an immunotherapy, which recently picked up another approval in Japan.
All of this means that Merck has a lot of headline potential in coming weeks, especially at a time when a new Covid-19 variant is spreading across the world. There's quite a bit of options activity in Merck today as traders place bets ahead of the news.
Technicals and Sentiment
Merck is currently near support from a long-term trend line and from the 200-day EMA. It has 26% upside to the average analyst price target and a bullish put/call ratio of .43. It has an average analyst rating of 9.3/10, which is very high. It gets an above average ESG score of 2.25/3.
Value
S&P Global gives Merck's fundamentals an average score of 90/100. IIt's currently trading -1.4 standard deviations below where it usually trades in relation to its major moving averages. Forward dividend yield is about 3.7%, forward P/E just over 11, forward P/S about 3.4. The price to free cash flow ratio is fairly high, at over 20, but that has to be interpreted in light of the other multiples. estimate that Merck has about 18% upside to its average price multiple of the last 3 years. Its earnings outlook is highly positive; I score its growth forecast a 5/6.
Merck MRK - Currently at an interesting long entry with good R/RRisk/reward to first profit target is 5.29. Currently holding support.
$MRK recap....Yesterday liked the daily set up and wanted to take one more flier on the $77 calls if it ran. Grabbed them at $0.18, closed in the morning on the pop at $0.60. 233% profit
$MRK worked as planned...Nice set up earlier in the week, looked like it should move and a stock that could move regardless of the FOMC decision. Took $74 calls from $0.70 to $2.30, 228% return...moving on for now
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$MRK switched to same week...Had some $80 calls for 12/31, pulled them into the same week $74 calls to get a quick potential push this week. Looks like a decent set up from now to end of week. Relative strength today in a bad market. Will close out tomorrow with a bad open.
Undervalued Stock Series #3 : MERCKSeveral DCF valuations have suggested that the current price is on average +35% under the fair price.
I took a quick look at their financials : their income last 5 years is positive, their revenue have grown last 5 years, their current asset > current liabilities and their Free Cash Flow can deal with their debts (i.e if they decided to pay off all of that debt, they could)
Pipeline on phase 3 there are 25 products and 3 products under review (one of them is Anti-Viral COVID-19
molnupiravir (MK-4482) (US, EU))
-source : their website
On the technicals, price is trading below the 100-200 EMA. The TSI shadow indicator still suggest we are still in a downtrend. As far as I am concerned, the lower the share price will go, the better. As long as the fundamentals still as it is now, I am happy the share price to go lower.
I take note of last week's high as a level of interest as if this level is broken, it could be a sign of a momentum shift.
$MRK emotional play...Still trying to figure out this stock after it FOMO'd us into some $100 calls on the COVID pill. Alot of other good pipeline drugs and news, with COVID news out there and this consolidating, could take one more try at this. Looking at 12/31 calls, any of them between $75 and $80 seem reasonable.
Merck (MRK) BullishMRK bounced off resistance yesterday. It also formed On Balance Volume divergence. I am bullish on Merck stock.
MRK: Bullish bias Expecting some bullish trend change after long bear movement. Hopefully price stopped around the support and recover its bull strenght.
$MRK starting to move...Premiums got crushed on the anticipation, need more of a move to let them pay off. Either way, we need a multi-day move to get back to where we need to be. Just going to hold to end of week and see if we can at least clear $80
Bullish Morning StarMRK had some good news this morning. Also from a technicals, resting on a major support line along with forming a bullish morning star pattern near the bottom of its trading range.
$MRK approval now what?...We got the advisory committee approval, just barely, now we see if this is a sell the news event or something to finally recover on. There has been plenty of other news related to this stock that would net lean positive as well. I have a strangle that will take either direction for the same week, but would prefer to the upside for my longer term calls.
$MRK last chance before news...Took one last try at this before news, high risk as the data doesn't seem to be that great but there aren't any other pills read to go to market this second. $85 12/17 call at $0.30, might pair with a $70 put for next week to cover myself
MRK Analysis - Rising WedgeRising Wedge and Ascending H&S, leading to a break down over a weak uptrend line
down to the .618 Fibonacci line
Rising wedges and H&S patterns are both considered bearish
Attaching my thoughts about the ascending H&S
$MRK complete failure...So far, poor news on both the pill and another HIV trial leading to a downgrade...so the January $100's have been beaten down pretty bad. The original thesis was based on news on approval of the COVID pill which the EU is meeting on this week. Will wait for that then reassess...
$MRK bad news, but held...News out that the efficacy was only 30% vs 50% previously noted on the COVID pills, but...$100 calls are up today from 12/17 out...seems like something is up here...
MERCK ANALYSISI would like to see MERCK pull back to $81-82 range. With news coming out of FDA approval of their COVID pill it will be a quick spike to the 85-95 range and then a pullback. Approval should happen the first or second week of December. Looking at options calls for $83 if stock pulls back to $81-82.
