Merck (MRK) Options Signal Bullish Bias: Key Strike Levels and Trading Setups for Jan 16, 2026

• Merck’s stock (MRK) trades at $109.43, down 1.39% from its previous close, but technicals and options data hint at a short-term bullish bias.
• Call options dominate open interest, with heavy concentration at the $115 and $110 strikes for Friday’s expiration, while puts cluster at $108–$109 for next week.
• Analyst upgrades and a dividend hike support the case for a rebound, but recent earnings miss and executive sales add nuance.

Here’s the core insight: Merck’s options market is pricing in a strong near-term bias toward $115, with block trades and technicals aligning for a potential breakout. But keep an eye on the $106.71 support level—it’s a critical line in the sand.Bullish Sentiment in Options and Block Trades

Let’s start with the options chain. Call open interest is skewed toward the $115 and $110 strikes for Friday’s expiration, with 15,440 and 12,323 contracts outstanding, respectively. That’s not random—it’s a vote of confidence from options players who see $115 as a key psychological hurdle. The put side tells a different story: while volume is lower, the $108 and $109 puts for next Friday (MRK20260123P108 and MRK20260123P109) have 1,436 and 1,193 contracts, hinting at cautious hedging below current levels.

Block trades add intrigue. A 1,481-lot put block at $108 (MRK20260123P108) for next Friday suggests some big players are hedging against a pullback. Meanwhile, a $271,000 call block at $115 (MRK20260320C115) with March 2026 expiration shows long-term bullish conviction. The message? Short-term bulls are stacking up for a $115 test, while bears are quietly preparing for a dip to $108.

News and Analysts: Fuel for the Bull Case

Merck’s recent news isn’t all bad. Analysts from BMO, Wolfe, and Wells Fargo have raised price targets to $130–$125, and the dividend hike to $0.85 (3.1% yield) is a draw for income investors. The FDA’s acceptance of Welireg for renal cell carcinoma is a positive catalyst, expanding Merck’s oncology footprint. But don’t ignore the negatives: Q4 earnings missed estimates, and an executive sold 8,614 shares in November, trimming his stake by 25%. That’s a red flag for some, though not necessarily a death knell.

Actionable Trade Ideas for Today

For options traders, the MRK20260116C115 call (Friday expiration) is a high-conviction play if the stock breaks above $110.72 (today’s intraday high). With 15,440 contracts in open interest, this strike is a magnet for momentum. If you prefer a longer timeline, the MRK20260123C116 call (next Friday) offers a slightly wider buffer, given the stock’s current range.

On the stock side, consider entry near $108.43 (today’s intraday low) if support holds. A break above $110.72 could target $113.52 (Bollinger upper band) or even $115. Stops should sit below $106.71 (middle Bollinger band). For the bearish angle, the MRK20260123P108 put is a hedge if the stock dips below $109.43 without holding long-term.

Volatility on the Horizon

Merck’s options market is pricing in a clear directional bias—up. The combination of analyst upgrades, dividend appeal, and regulatory wins gives bulls a strong hand. But don’t dismiss the risks: earnings misses and executive sales could trigger a short-term selloff. The key is to stay nimble. If MRK holds above $106.71, the bull case strengthens. Below that, the puts at $108–$109 become more relevant. Either way, this week’s options expirations will be a litmus test for the stock’s near-term direction.