Merck Stock Extends Slide With 4.31% 3-Day Drop Amid Bearish Technicals

Merck (MRK) declined 3.30% to close at $78.29 on 2025-06-17, marking its third consecutive daily loss and bringing the 3-day decline to 4.31%. This extended downturn reflects mounting bearish pressure, setting the context for our technical evaluation.
Candlestick Theory
Recent sessions show a clear bearish trajectory for Merck, with the current three-day decline forming a descending triplet pattern – particularly notable as each candle closed near its low, demonstrating persistent selling pressure. Key resistance now emerges at $81.71 (June 13 high), while immediate support rests at $78.19 (June 17 low). A breach below $78.19 could trigger further downside toward the May swing low of $73.47. The lack of long lower wicks during this retreat signals minimal buyer absorption.
Moving Average Theory
The 50-day SMA at $81.30 converges with the 100-day SMA at $87.15 in a decisive bearish cross, confirming intermediate-term weakness. With the price currently trading 8.5% below the 200-day SMA at $85.60, the long-term trend remains negatively skewed. Sustained trading below the $81 level – now acting as dynamic resistance where the 50-day SMA resides – would affirm bearish momentum.
MACD & KDJ Indicators
MACD exhibits a bearish configuration with the histogram expanding below the zero line since June 12, signaling strengthening downward momentum. KDJ readings (K: 22, D: 28, J: 10) have entered oversold territory, though without divergence. While oversold conditions suggest potential short-term relief, the absence of bullish reversal signals in both oscillators warrants caution against premature long entries.
Bollinger Bands
Merck has breached the lower Bollinger Band ($79.80) with a 1.5% deviation, often indicating oversold extremes. Notably, the bandwidth expanded 18% during the three-day selloff, reflecting volatility surge during breakdowns. While price typically reverts toward the midline after such violations, the lower band’s downward slope suggests any bounce may be tactical rather than trend-reversing.
Volume-Price Relationship
Down days since June 13 saw higher volume than up days, validating bearish conviction. The June 17 volume of 9.7M shares surpassed the 15-day average by 12%, confirming capitulation. However, the absence of climactic volume (compared to February’s 50.8M capitulation) suggests additional selling pressure may emerge before a durable bottom forms.
Relative Strength Index (RSI)
The 14-day RSI at 31 verges on oversold territory but lacks bullish divergence. While the RSI nears levels that have preceded rebounds (notably in May 2025), momentum remains pointed downward. Given the indicator’s lagging nature in strongly trending moves, oversold readings should be viewed as a warning rather than a reversal signal without confirmation from sentiment or volume shifts.
Fibonacci Retracement
Applying Fib levels between Merck’s March 21 high ($94.68) and May 14 low ($73.47) shows significant confluences. The current price is testing the 61.8% retracement ($80.45) as resistance – precisely where the June 13 peak stalled. The next critical zone is the 78.6% level ($77.50), which aligns with the June 17 intraday low of $78.19. A decisive break below $77.50 could challenge the 100% extension at $73.47.
Confluence & Divergence Observations
Confluence of resistance appears at $80.45–81.71, where the 61.8% Fib, 50-day SMA, and recent price action converge. Notable divergence exists between the oversold KDJ/RSI readings and continuing price deterioration, suggesting weakening downside momentum but lacking reversal confirmation. Importantly, MACD and volume validate the bearish trend, emphasizing the risk of further declines unless Merck reclaims $80.45 with expanding volume.