MRK Week

The pharmaceutical giant Merck & Co. Inc. (MRK) has moved above the 13- and 26-week moving averages on the second week of rising volume.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
MRK (daily) $35.67

The price action was less than explosive -- more of the damp firecracker variety. The intra-day rise covered 3.7% low to high, a good daily move but a bit anemic for a weekly. A pullback late in the week brought the net rise to 1.8%.

Volume was up 14% from the prior week and 32% from two weeks ago.

So, the rise must count as slow and steady, and often that's the best kind, because it gives the trader an opportunity to enter a position before the move is exhausted.

This is the first time that MRK has traded above the two moving averages since April 5.

Reversal Levels

• $41.56, +16.5%
• $39.04, +9.5%
• $36.25, +1.6%
• $35.67 <== You are here.
• $31.10, -12.8%

MRK has been declining since it hit $96.69 in November 2000. So far it has recorded three lower highs and two lower lows.

The present decline that begin in January at $41.56, if it continues, would bring the downtrend to a third lower low.

But there are no guarantees in the market, anymore than there are in love or the lottery.  A move above $41.56 would break the downtrending pattern and suggest that something else was afoot.

Last week's rise was accompanied by a bull phase on Person's Proprietary Signal. The last such bull phase switch on the weekly chart persisted for 11 weeks.

---

The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we remerge from the wreckage.

---

Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.