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

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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