Merck (MRK) Options Signal $115 Bullish Bias: Here’s How to Position for a Breakout Amid $30B Acquisition Hype

• Merck’s stock (MRK) trades at $109.84, up 1.46% intraday, with a short-term bullish Kline pattern and RSI at 64.07.
• Options data shows heavy call open interest at $110, $115, and $120 strikes for Friday’s expiration, while puts dominate at $75 and $95.
• Block trades hint at strategic positioning: 1,000 contracts traded in MRK20260116C105 and MRK20260320P105, suggesting near-term bullish bets and long-term hedging.

The options market and technicals are painting a clear picture: Merck is primed for a breakout. With call open interest surging at key strikes and institutional block trades amplifying the signal, the stock’s 1.46% intraday gain feels like the calm before a storm. Let’s break down why this could be a pivotal day for MRK traders.

Bullish Sentiment at $115: What the Options Chain Reveals

The options data tells a story of conviction. For Friday’s expiration (Jan 16), the top OTM calls are clustered at $110 (OI: 15,768), $115 (15,349), and $120 (3,334). This isn’t just noise—it’s a sign that institutional players are stacking up for a potential $115+ move. The put/call ratio of 0.67 (calls dominate) reinforces the bullish tilt, though the heavy put OI at $75 and $95 shouldn’t be ignored. They act like a safety net for downside risks, but the sheer volume of calls suggests the market expects Merck to outperform.

Block trades add another layer. The MRK20260116C105 call (1,000 contracts, $416K turnover) hints at near-term bullish bets, while the MRK20260320P105 put (1,000 contracts, $320K turnover) shows hedging for March. These moves signal a mix of short-term optimism and long-term caution—a classic setup for a breakout trade.

News That Fuels the Fire

Merck’s recent headlines are a goldmine for bullish analysis. The $30B acquisition of Revolution Medicines isn’t just a headline—it’s a strategic play to future-proof Keytruda’s legacy. With RAS-targeting therapies in the pipeline, the market is pricing in long-term growth. The dividend hike and analyst upgrades (Goldman Sachs’ $120 target, Wolfe’s $135) further validate this narrative.

But here’s the catch: Keytruda’s patent cliff in 2028 still looms. The options market isn’t pricing in immediate risk, but the heavy put OI at $95 and $75 suggests some investors are hedging against a potential slowdown. For now, the news flow and options data are aligned—Merck’s story is about growth, not decay.

Actionable Trade Ideas: Calls at $115, Stock Breakouts at $110

For options traders, the MRK20260116C115 call (expiring Friday) is a standout. With 15,349 open contracts, it’s the most liquid OTM call. If Merck breaks above $110 (its intraday high is $109.94), this strike could see explosive gains. A cheaper alternative? A bull call spread: buy MRK20260116C110 and sell MRK20260116C115 to cap risk while still profiting from a $115+ move.

Stock traders should watch two levels: $109.84 (current price) and $107.95 (intraday low). A close above $109.94 would test the Bollinger Upper Band at $113.07. If that holds, target $115 as a key resistance. A breakdown below $107.95, however, could trigger a test of the 30D support at $100.84.

Volatility on the Horizon: Why MRK Could Challenge $120 by Q1 2026

The pieces are in place for a breakout. Merck’s acquisition news, bullish options flow, and technical alignment all point to a potential $120 run. But don’t ignore the risks: the $115 strike is a psychological hurdle, and the block trades at $105 suggest some hedging activity. For now, treat this as a high-conviction trade with clear entry/exit points. If Merck’s stock holds above $109.84 and the $115 call sees buying interest, this could be the start of a multi-week rally. Stay nimble—this market isn’t sleeping.