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 at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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