MRK, along with many othe rpharma stocks has taken some serious beating.
But we like fear - as an opportunity- and it’s here( I dare say it) based on the bottom most will rejection, aka a shooting star.
So here are my forecasts in my crystal ball::
1. Overall Trend and Structure
• Longer-Term Trend: MRK peaked near the $115–$120 region in late 2022/early 2023 and has since been making lower highs and lower lows on the weekly timeframe. This suggests a downward bias over the past 12+ months.
• Recent Price Action: Price is hovering around the mid-$80s, testing support in the $80–$83 zone. This area held as support a few times in 2021–2022 and is now being revisited.
• Break of Structure (BOS) & Change of Character (CHoCH) Markers:
• The chart indicators label potential break-of-structure levels where bulls and bears exchanged control.
• Since late 2022, these BOS levels have mostly favored the bears, confirming the downtrend.
• A bullish CHoCH would require a strong close and sustained trading above the most recent swing high (somewhere in the $90–$92 zone on the weekly).
2. Key Technical Indicators
1. Stochastic Oscillator (Lower Panel)
• Appears oversold or near the lower region. On a weekly timeframe, this sometimes suggests that bearish momentum could be losing steam. A bullish crossover from oversold levels often points to a short-term rebound.
2. Momentum Oscillators (e.g., RSI/MACD, if present)
• While not explicitly shown, the lower indicator panel with wave-like patterns suggests momentum has been negative but may be stabilising.
3. Support & Resistance Levels
• Immediate Support: $80–$83 zone. A weekly close below $80 could open the door to the mid-$70s or even $70.
• Initial Resistance: $90–$92 (recent swing highs). Price needs to reclaim this region to confirm a potential bullish reversal on the weekly timeframe.
• Secondary Resistance: $95–$100. If the price clears $92, this would be the next zone of overhead supply from prior consolidation.
3. Possible Scenarios & Probability Estimates
Below are hypothetical scenarios with rough probability estimates, assuming no major market-wide shocks and stable macro conditions.
Bullish Reversal Scenario (Est. 55–60% probability)
1. Hold Support around $80–$83:
• If MRK holds above this region on a weekly closing basis, buyers may attempt a short-term bounce.
• Timeframe: Could take 2–5 weeks for a solid weekly close confirming support.
2. Upside Targets:
• First Target: $90–$92 (key swing high + psychological level).
• Second Target: $95–$100 if price breaks and holds above $92 on strong volume.
3. Catalysts to Watch:
• A weekly close above $92 would be a “change of character” from lower highs to a potential new uptrend on the weekly.
• Bullish crossover in the Stochastics or MACD on the weekly.
Continued Downtrend Scenario (Est. 40–45% probability)
1. Failure at $80 Support:
• If the stock breaks below $80 on a weekly close, the downtrend likely continues.
• Timeframe: A decisive break can happen within 1–3 weeks if sellers remain strong.
2. Downside Targets:
• First Target: $75 region, near previous support levels.
• Second Target: $70 if selling pressure accelerates and overall market sentiment remains weak.
3. Catalysts to Watch:
• Weak earnings, lowered guidance, or broader market declines.
• Stochastics remaining in oversold territory without crossing back up, indicating persistent downward momentum.
4. Trade Direction & Time Estimates
• Short-Term (1–4 weeks):
• Expect choppy price action around $80–$83. A near-term bounce is possible if momentum indicators turn bullish.
• If a bounce materialises, watch $90–$92 as a critical resistance.
• Medium-Term (2–3 months):
• If bulls successfully defend $80 and break $92, a run to $95–$100 could happen by mid-spring to early summer.
• Conversely, if $80 fails, the downtrend may persist into the $70s in a similar timeframe.
5. Risk Management Considerations
1. Confirm Volume & Momentum:
• Wait for a weekly close above (or below) key levels ($80 support or $92 resistance) to confirm the trend direction.
2. Position Sizing:
• If going long near $80 support, consider a stop-loss just below $80 (e.g., $78–$79) to limit risk.
• If anticipating a breakdown, watch for confirmation (weekly close below $80) before entering short positions.
3. News & Fundamentals:
• MRK is a large pharmaceutical company sensitive to drug approvals, patent news, and broader healthcare developments. Technicals alone might not capture sudden catalyst-driven moves.
Final Thoughts
• Most Likely Near-Term Path: A technical rebound attempt from $80–$83, but the stock must decisively clear $90–$92 to signal a genuine bullish reversal on the weekly chart.
• Overall Bias: The multi-month trend is still down, so the burden of proof is on bulls to show a structural change in character.
Again, these are probabilistic views.
Good luck out there
But we like fear - as an opportunity- and it’s here( I dare say it) based on the bottom most will rejection, aka a shooting star.
So here are my forecasts in my crystal ball::
1. Overall Trend and Structure
• Longer-Term Trend: MRK peaked near the $115–$120 region in late 2022/early 2023 and has since been making lower highs and lower lows on the weekly timeframe. This suggests a downward bias over the past 12+ months.
• Recent Price Action: Price is hovering around the mid-$80s, testing support in the $80–$83 zone. This area held as support a few times in 2021–2022 and is now being revisited.
• Break of Structure (BOS) & Change of Character (CHoCH) Markers:
• The chart indicators label potential break-of-structure levels where bulls and bears exchanged control.
• Since late 2022, these BOS levels have mostly favored the bears, confirming the downtrend.
• A bullish CHoCH would require a strong close and sustained trading above the most recent swing high (somewhere in the $90–$92 zone on the weekly).
2. Key Technical Indicators
1. Stochastic Oscillator (Lower Panel)
• Appears oversold or near the lower region. On a weekly timeframe, this sometimes suggests that bearish momentum could be losing steam. A bullish crossover from oversold levels often points to a short-term rebound.
2. Momentum Oscillators (e.g., RSI/MACD, if present)
• While not explicitly shown, the lower indicator panel with wave-like patterns suggests momentum has been negative but may be stabilising.
3. Support & Resistance Levels
• Immediate Support: $80–$83 zone. A weekly close below $80 could open the door to the mid-$70s or even $70.
• Initial Resistance: $90–$92 (recent swing highs). Price needs to reclaim this region to confirm a potential bullish reversal on the weekly timeframe.
• Secondary Resistance: $95–$100. If the price clears $92, this would be the next zone of overhead supply from prior consolidation.
3. Possible Scenarios & Probability Estimates
Below are hypothetical scenarios with rough probability estimates, assuming no major market-wide shocks and stable macro conditions.
Bullish Reversal Scenario (Est. 55–60% probability)
1. Hold Support around $80–$83:
• If MRK holds above this region on a weekly closing basis, buyers may attempt a short-term bounce.
• Timeframe: Could take 2–5 weeks for a solid weekly close confirming support.
2. Upside Targets:
• First Target: $90–$92 (key swing high + psychological level).
• Second Target: $95–$100 if price breaks and holds above $92 on strong volume.
3. Catalysts to Watch:
• A weekly close above $92 would be a “change of character” from lower highs to a potential new uptrend on the weekly.
• Bullish crossover in the Stochastics or MACD on the weekly.
Continued Downtrend Scenario (Est. 40–45% probability)
1. Failure at $80 Support:
• If the stock breaks below $80 on a weekly close, the downtrend likely continues.
• Timeframe: A decisive break can happen within 1–3 weeks if sellers remain strong.
2. Downside Targets:
• First Target: $75 region, near previous support levels.
• Second Target: $70 if selling pressure accelerates and overall market sentiment remains weak.
3. Catalysts to Watch:
• Weak earnings, lowered guidance, or broader market declines.
• Stochastics remaining in oversold territory without crossing back up, indicating persistent downward momentum.
4. Trade Direction & Time Estimates
• Short-Term (1–4 weeks):
• Expect choppy price action around $80–$83. A near-term bounce is possible if momentum indicators turn bullish.
• If a bounce materialises, watch $90–$92 as a critical resistance.
• Medium-Term (2–3 months):
• If bulls successfully defend $80 and break $92, a run to $95–$100 could happen by mid-spring to early summer.
• Conversely, if $80 fails, the downtrend may persist into the $70s in a similar timeframe.
5. Risk Management Considerations
1. Confirm Volume & Momentum:
• Wait for a weekly close above (or below) key levels ($80 support or $92 resistance) to confirm the trend direction.
2. Position Sizing:
• If going long near $80 support, consider a stop-loss just below $80 (e.g., $78–$79) to limit risk.
• If anticipating a breakdown, watch for confirmation (weekly close below $80) before entering short positions.
3. News & Fundamentals:
• MRK is a large pharmaceutical company sensitive to drug approvals, patent news, and broader healthcare developments. Technicals alone might not capture sudden catalyst-driven moves.
Final Thoughts
• Most Likely Near-Term Path: A technical rebound attempt from $80–$83, but the stock must decisively clear $90–$92 to signal a genuine bullish reversal on the weekly chart.
• Overall Bias: The multi-month trend is still down, so the burden of proof is on bulls to show a structural change in character.
Again, these are probabilistic views.
Good luck out there
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.