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Merck Approaching Critical Support

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Shares of Merck (NYSE:MRK) are trading down $2.16 today, and are now sitting just above a key support level.

Merck Daily Chart

After peaking in January, Merck has been setting a series of lower lows. The March rally was an impressive $14 gain, but it failed to exceed the February high. The next rally was turned back at the 200-dma, and the most recent bounce quickly failed at the 50-dma. The last four declines have all found support at $71.72, which is within with 49 cents of where Merck now sits.

Merck Point and Figure Chart

A point and figure chart of Merck also confirms that $72 is a critical support level. The bullish support line has already been broken, and if MRK drops one more box, it will flash a triple bottom sell signal. The bearish price objective is $63, but a drop to the March low of $66 may stop any potential declines.

Point and Figure Webinar

If you are still baffled by point and figure charting, Jeff Bailey will be hosting an interactive seminar on the subject tomorrow night. For more information, go to www.premierinvestorseminars.com/onlineseminars/jeff061201. asp

Jeff Canavan
Assistant Analyst
www.premiermarkets.com

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