During Thursday night's Mad Money program Jim Cramer favored Merck & Co. Inc. (MRK) noting that it is one of the few drug stocks that investors can bank on right now. Let's check out the charts and indicators to see if technical analysts can bank on it.
In the weekly bar chart of MRK, below, we can see a more positive-looking setup with price action and indicators. Prices are above the rising 40-week moving average line.
The weekly OBV line shows aggressive buying from the end of 2017 and it is just short of making a new high for the move up. The MACD oscillator has been above the zero line since June of 2018 so the trend is strongly up but the indicator recently turned lower for a take profits sell signal.
In this Point and Figure chart of MRK, below, we can see a possible downside price target of $72 being project but a rally to $87.32 will refresh the uptrend.
Bottom-line strategy: The longer-term picture of MRK is positive while the short-term chart suggests we take things slow. Traders could go long MRK on strength above $87.32 using a reasonable stop loss order below.