Merck & Co., Inc. is a research- driven pharmaceutical company that discovers, develops, manufactures and markets a range of innovative products to improve human and animal health, directly and through its joint ventures. The Company sells its products primarily to drug wholesalers and retailers, hospitals, clinics, government agencies and managed health care providers such as health maintenance organizations and other institutions. (Source: Bigcharts)

In looking at the one-year weekly chart I spotted something very appealing about Merck. The stock has been trading in a tight consolidation channel for months now while its Moving Average Convergence Divergence (MACD) indicator is bottoming out quickly. This means that the stock is fighting against downward pressure and is successfully winning the battle against the bears. Furthermore, this is the typical process for any stock that is in a healthy uptrend and enjoys strong buying support.

Does this mean you should buy right now?!

Absolutely. Purchase half of your intended position and place a stop loss just below support at $41.50. Once the stock climbs above $46 on good volume you can then purchase the remaining block of shares.

Good Investing…