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Merck & Company Inc (MRK) - August 2, 2023

Drugmaker Merck (MRK) has been slipping down the rankings in the SIA S&P 100 Index Report since March. In July it fell out of the green zone into the Yellow Neutral Zone for the first time since last September and has continued to trend downward. Yesterday, Merck finished in 33rd position, down 2 spots on the day and down 17 places in the last month. A growing combination of indicators suggests that Merck (MRK) shares have peaked and started into a new downtrend. Back in May, a significant high was marked by a bearish Shooting Star doji candle (the opposite of a hammer), which suggested bulls were running out of steam and bears were starting to gather strength. Following an initial correction, MRK peaked at a lower high and since then, the shares have snapped an uptrend line, broken down below their 50-day average and retested it as new resistance, and broken below their 200-day moving average with a death cross of the averages pending.

Initial support may appear in the $100.00 to $102.00 area between a round number and an uptrend line, then closer to $94.00 where a January correction bottomed out. Initial resistance appears at the 50-day average near $110.00.

This 1% chart shows how the technical situation for Merck has deteriorated significantly over the past month. In July, a rebound out of what had looked like a normal correction peaked at a lower high. The shares then staged a bearish Triple Bottom breakdown. Following a small bounce of only 3 rows, the shares have turned downward again, yesterday staging a bearish Double Bottom breakdown and a Bearish Catapult, confirming the start of a new downtrend.

Initial downside support appears near the $100.00 round number, followed on trend by $97.25 based on a vertical count and $91.60 based on a horizontal count. Initial resistance appears near $109.55 based on a 3-box reversal.

With its bearish SMAX score falling to 3, MRK is exhibiting weakness against the asset classes.

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