Undervalued, Oversold, Overlooked: MRK Hits The Key Zone!Hi all,
Merck & Co. (MRK) is a global pharmaceutical titan and is currently trading near its 52-week low of ~$79. Anchored by Keytruda’s 7% YoY revenue growth, a stable ~4% dividend yield, and an average fair value estimate of $156.59 (98% upside), MRK appears significantly undervalued.
Analysts forecast a 12-month price target of $118.05, implying 49% upside, supported by a strong pipeline and solid financials. While tariff concerns and Keytruda’s 2028 patent expiration pose risks.
Technically speaking, MRK has fallen 43% from its all-time high and has reached the strongest area on the chart—a key support zone offering a compelling opportunity to build mid- or long-term positions. This critical area is defined by multiple technical factors, creating a high-probability setup for a potential reversal:
Role Reversal Support: A broad, well-established resistance zone, aged like fine wine, has now flipped to act as support. This classic role reversal provides significant confluence to the setup.
Textbook Trendline: A perfectly respected trendline, straight out of technical analysis textbooks, has consistently held. The price has approached this trendline from higher highs, underscoring its strength as a key support level.
50% Retracement Level: A critical level often watched for potential reversals.
Monthly EMA200 Confluence: The 200-period exponential moving average on the monthly chart adds further strength to this area, reinforcing its technical significance.
Strategic Guidance:
This setup requires strong conviction. If you’re not prepared to buy in the lower gray areas of this support zone (marked on the chart), do not initiate a position.
In today’s market sentiment, your fundamental research must be robust, and technical analysis allows you to get that much confidence to make it happen!
Ask yourself: If the price falls further into the gray zones, am I willing to buy more? If your answer is yes, the current price presents a strong entry point for mid- to long-term positions.
If the answer is no—if you’re unsure about buying at lower levels or find yourself questioning what to do if prices drop further—refrain from starting a position. In volatile markets, clarity and discipline are essential. Only enter if your strategy is clear and your conviction matches the opportunity!
Good luck,
Vaido
