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May 31, 2006
Merck Breaks Down
Merck (MRK) was holding up better than the rest of the HealthCare sector in early May, but the recent breakdown on high volume signals a continuation lower and this will weigh on the group. The stock gapped down in April and then formed a rising wedge. This is a bearish consolidation and the stock broke the lower trendline last week. There was a brief attempt to undo this breakout on Friday, but the stock totally fell apart on Tuesday with a close below 33.5 on high volume. As a continuation of the prior decline, I expect a move to around 30 or another 10% down.
Posted by Arthur B. Hill at May 31, 2006 07:46 AM