MRK declines to lowest close since July 24th
Merck & Company Inc. (MRK) Technical Analysis Report for Oct 27, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MRK ended Tuesday at 77.99 losing $0.85 (-1.08%) on high volume, slightly underperforming the Dow Indu. (-0.8%) following today's earnings report. Today's close at 77.99 marks the lowest recorded closing price since July 24th. Trading $1.30 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on October 21st, MRK actually gained 1.46% on the following trading day. Closing below Monday's low at 78.26, the stock confirmed its breakout through the previous session low after trading up to $0.27 below it intraday.
Daily Candlestick Chart (MRK as at Oct 27, 2020):
MRK reported earnings of $1.74 per share before today's market open. With analysts having expected an EPS of $1.43, Merck & Company Inc. beat market expectations by 21.7%. The company's last earnings report was released on July 31, 2020, when Merck & Company Inc. reported earnings of $1.37 per share beating market expectations by 20.2%.
Tuesday's trading range has been $2.24 (2.84%), that's far above the last trading month's daily average range of $1.30. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MRK.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Closing Marubozu.
After spiking up to 80.23 during the day, Merck & found resistance at the 20-day moving average at 79.92.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Closing Marubozu" stand out. Its common bearish interpretation has been confirmed for Merck &. Out of 13 times, MRK closed lower 69.23% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after seven trading days, showing a win rate of 61.54% with an average market move of -0.17%.