Bulls in Charge of Merck

Published on Thursday, 09 September 2010 01:54 Written by Christopher Lynn

New York, September 9th (TradersHuddle.com) - Shares of Merck & Co. Inc. (NYSE:MRK) ended the trading session higher by $0.35 or 0.99% from its previous close. Merck's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

Merck & Co., Inc. (NYSE:MRK), the global pharmaceutical company that develops, manufactures, and markets a broad range of human and animal health products. Merck's products include Zocor for treatment of elevated cholesterol, Propecia for treatment for male pattern hair loss, Fosamax for preventive treatment of osteoporosis, and Singulair for treatment of asthma. Merck was founded in 1891 and is headquartered in Whitehouse Station, New Jersey.

Merck's recent stock range has been formed by a trough where calculated support was defined at $34.41 and by a peak that established the resistance level at $35.84, which could be used by traders planning their trades.

Traders wanting to establish a position in Merck or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk as it shows where the bears were able to push the stock down, before the bulls stepped in.

The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: