Merck Surges 5.24% on Bullish Technicals, Eyes 105.84 Breakout for Uptrend Continuation

Merck (MRK) has surged 5.24% in the most recent session, marking a three-day winning streak with a cumulative gain of 11.26%. The candlestick pattern suggests a strong bullish bias, characterized by consecutive higher highs and higher lows, indicating sustained buying momentum. Key support levels are likely clustered around the 95.05–97.76 range (November 19–21 lows), while resistance has shifted to the 100.4–105.84 range (November 24–25 highs). A potential bearish reversal could emerge if price fails to hold above the 97.76 level, but the recent breakout above the 105.84 high suggests a continuation of the uptrend.
Candlestick Theory
The recent price action forms a series of bullish marubozu and inside bars, confirming institutional accumulation.

The 105.84 high breaches a prior resistance level, now acting as a dynamic support. A potential bearish signal would require a close below the 97.76 level, which could trigger a retest of the 95.05 support.
Moving Average Theory
The 50-day MA (approx. 88.3) is significantly below the 200-day MA (approx. 85.4), indicating a long-term uptrend. However, the 50-day MA is accelerating upward, aligning with the recent rally. The 100-day MA (approx. 87.9) is also trending higher, suggesting short-term momentum is intact. A crossover of the 50-day above the 100-day MA would reinforce bullish bias.
MACD & KDJ Indicators
The MACD line (12.3) is well above the signal line (7.1), with a positive histogram, indicating strong momentum. The KDJ indicator shows the stochastic %K at 88 and %D at 82, entering overbought territory. While this suggests a potential pullback, the divergence between %K and %D is narrowing, implying the uptrend may persist.
Bollinger Bands
The price is currently at the upper Bollinger Band (105.84), with a 20-day volatility reading of 2.1. The bands have widened significantly, reflecting heightened volatility. A retest of the mid-band (approx. 99.7) could occur if the overbought conditions correct, but the upper band’s breach suggests continuation is probable.
Volume-Price Relationship
Trading volume has spiked to 22.23 million shares, the highest in the provided dataset, validating the recent price surge. However, the volume-to-price ratio (105.66/22.23M ≈ 4.75) is elevated, signaling potential exhaustion. A drop in volume during subsequent rallies would weaken the bullish case.
Relative Strength Index (RSI)
The RSI is at 72, entering overbought territory. While this typically signals a potential correction, the RSI has not peaked yet, and the recent rally has been supported by strong volume. A close below 60 would suggest a bearish phase, but the RSI’s alignment with the MACD implies the trend may persist.
Fibonacci Retracement
Drawing a Fibonacci from the 95.05 low (November 19) to the 105.84 high (November 25) identifies key retracement levels. A 38.2% retracement at 99.7 and a 61.8% level at 97.9 could act as critical support zones. A break below 97.9 would invalidate the bullish case and target the 95.05 level.
<text2visual>
The analysis highlights confluence between the MACD, Bollinger Bands, and Fibonacci levels, all pointing to a continuation of the uptrend. However, the overbought RSI and KDJ indicators suggest a short-term correction is probable. Divergences between the RSI and price action could signal a shift in momentum. While the volume supports the rally, caution is warranted if the 97.76 support fails to hold, as this could trigger a deeper pullback toward 95.05. The 50-day MA crossing above the 100-day MA would further validate the bullish bias, but traders should monitor for bearish divergences in the KDJ and RSI.