by Shane Ormond
On Feb 20, 2020
Shares of Groupon and Blue Apron tanked yesterday after their quarterly reports reignited skepticism about the companies’ “unconventional” business models. (And by “unconventional” I mean “doesn’t work.”)
Blue apron, groupon, e-trade, morgan Stanley
Blue apron, groupon
Yesterday, we looked at a Daily Price Chart of Microsoft Corp. and noted that the stock had been making a series of 52-Week Highs since March.
Today’s Chart is for Merck & Co., Inc. (NYSE: MRK).
Merck & Co., Inc. provides healthcare solutions worldwide. The company offers therapeutic and preventive agents to treat cardiovascular, type 2 diabetes, chronic hepatitis C virus, HIV-1 infection, intra-abdominal, fungal infection, insomnia, and inflammatory diseases. It serves drug wholesalers and retailers, hospitals, government agencies and entities, physicians, distributors, veterinarians, animal producers, and managed health care providers.
The Daily Price Chart below shows that MRK has traded in a clear bullish pattern of higher highs and higher lows since early November.
Track the Price Chart from lower left to the upper right…
This bullish trading pattern points to a further advance — stocks that make a series of two or more higher highs and higher lows reliably continue on in an upward trend.
But it’s important to note that strong stock rallies have pullbacks along the way, which present a buying opportunity for us.
Purchasing MRK after a 3 to 5% price pullback has provided a good entry point for the stock this year and has produced a healthy return.
We’ll keep watching MRK as it tops its previous highs and waiting for price pullbacks.
Maximizing Our Profit Potential
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
On November 26th, we highlighted Allstate Corp. (NYSE: ALL), noting that ALL stock had retraced below the Upper Keltner Channel after being temporarily overbought, providing a prime buying opportunity.
If you happened to have purchased ALL shares on that day, you’d be up 2.27%.
But… if you had purchased the right option contract, you would be up 28.73% in less than a month and a half’s time!
That’s the power of options.
Editor, Chart Of The Day