Is Merck Breaking Out?

Published on Wednesday, 20 June 2012 05:20 Written by TradersHuddle Wire

New York, June 20th (TradersHuddle.com) - Shares of Merck & Co. Inc. (NYSE:MRK) closed the session at $39.23 just above calculated resistance at $39.10. The stock effectively broke out and grasped the attention of momentum traders, which could eventually push the stock to a different trading range.

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.

The stock was trading in a well defined range with support at $33.13 and resistance at $39.10. Given that this range was broken, traders will be closely monitoring Merck's price action to gather clues on the future direction.

From a technical perspective, it can be expected that previous resistance becomes support, as the new range gets defined. However, given that Merck is still near the broken resistance level, traders will be focusing on the $39.10 level to see if the stock holds the breakout without rolling over.