Don't Ignore This Chart!

Merck Breaks To An All-Time High

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One company's failure can be another company's catalyst.  Take for instance Merck & Co (MRK), who on Friday, August 5th surged to an all-time high after Bristol Myers (BMY) had a failed clinical trial of its lung cancer drug.  BMY had clearly been outperforming MRK for several years up until this news hit.  Since then, the two have been moving in opposite directions with MRK closing at its all-time high.  Check out this chart:


MRK's uptrend likely isn't over as its monthly RSI has not yet hit overbought territory.  I would expect more weakness in BMY shares as its rise during this bull market has been parabolic, moving from 15 to 75 before the news hit earlier this month.  The money flow out of BMY will likely help to fuel further appreciation in MRK.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market. Learn More
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