Merck is one of the largest pharmaceutical companies in the world. It has a strong product lineup in cancer, cardiometabolic diseases, pediatric diseases, and vaccinations. Merck has a pipeline of drugs that are slated to arrive in the future, and it has also established a presence in animal health which provides steady growth. Merck, being one of the big pharma companies, has pricing power and scale. Its long term prospects look bright.

Merck’s long term monthly chart shows a 10-year long uptrend that made higher tops and higher bottoms till about 2020. The first two months of 2020 saw the price fall by about 30% and temporarily come close to the bottom of the long term trend. The price recovered by April 2020 and has since found support at the $72 level. Most recently, the price bounced off this support level and now looks poised to test the $85-$88 mark. A long position with a stop loss below the bottom trend line, at around $69, can be initiated.

Position entered into our long-term tracking portfolio today. The entry point is at $78.48 and stop-loss $64.09, 17% below the entry point. The short-term to medium take profit at the top of the trend is set at $93.09, giving a profit of 21%.