Stock of the day: Merck
04 October 2024
In today's Stock of the Day, I want to focus on Merck, as the chart shows a major sell signal that actually emerged two days ago. Taking a broader view, the price has been struggling since the end of June. At the end of July, Merck broke through a critical support level, marked by the lower yellow line at $119. Following the breakout, the broken support was retested as a resistance. The test in September was a victory for the sellers, as the price bounced off this resistance twice, confirming the bearish tone.
Since September 19th, we've witnessed a consistent downswing, with nearly every trading day closing in the red. The bearish sentiment intensified over the last two days, with the breakout of the black midterm uptrend line fueling a surge in short positions and selling pressure. Yesterday’s session closed at the lowest levels seen this year, putting the stock at levels last reached in December 2023. This sustained decline adds more weight to the sell signal, which remains valid as long as the price stays below $119.