timwest
Short

Merck MRK daily has 5 monster volume days where gap UP's then...

NYSE:MRK   MERCK & COMPANY, INC. COMMON STOCK (NEW)
205 3 2
What do you make of this pattern of volume in Merck             MRK             here on the daily chart?

Each time this has happened since January it has moved higher, but I think it is distribution by a massive seller, akin to the days of Jesse Livermore. It is so unusual that I'd have to say in my nearly 30 years of watching charts that I haven't seen a chart look like this before. If MRK             can break under one of these support lines, then it could mark the end of this uptrend. Granted I don't see tremendous downside risk, perhaps 10% or so.

Strategy: Sell short going under 57 with a 59 stop. Target initially 54-53.

Tim 4:16PM EST, May 6, 2014 57.11 last -1.52
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Very good
Reply
Fantastic results. I captures a little portion of this move thanks to you. (56.60 to 54.9) Thanks!

Any thoughts for a switch to a long trade?

Seems that for a longer term core portfolio holding this would be a good opportunity.

3%+ dividend. The 53/54 level should hold and I'm fairly confident that MRK will be trading in the 60's very shortly. (early summer)
Reply
Well it's been a fairly good long trade every time that we've got down to this trend line.

However, I do like the short trade here. Upward channels typically break to the downside.

Your strategy looks safe.
+1 Reply
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