We all know about the recent troubles that Merck has had (Vioxx, an SEC inquiry, Fosamax). Some might argue that things are about as bad as they could get and the stock is now a buy. That very well could be a valid point But I won’t get into that. I was asked to look at the chart though:
mrk is a big dow stock that is easy to trade, and very liquid option market as well if you (we) can spot the bottom or trend there is money to be
made so I would like you to look at it. chart wise….. my investment time frame is a little longer than yours, (1 month or so since I use the options to
play the stocks)
Hey, I’ve held stocks for a month before! But back to Merck — This is a stock that I’d just avoid, especially as a long. There are lots of easier plays out there. For the time-frame of a month I’d probably look at what the 10-day moving average. Since that average is above price it tells me that the trend is down so I’d either avoid it or short it. But if I were a counter-trend trader and wanted to try it as a long I think there’s a good stop-loss point just below the lows of a couple of days ago. (I don’t know how that translates to the options world though.)
