- MRK stock has been rejected from the 200-day EMA recently.
- Merck & Company released its Q2-2023 consensus on August 1, 2023.
The Biden administration has revealed the first 10 drugs for which Medicare will negotiate prices under the Inflation Reduction Act (IRA) in August. The Januvia drug for Diabetes by Merck & Company was selected in the renewed medicare negotiations. The move has shattered the stocks of pharmaceutical giants like Merk & Co Inc. (MRK), Johnson & Johnson (JNJ), and Pfizer (PFE).
Since the end of August 2023, the stocks of pharmaceutical giants like JNJ, PFE, and MRK have faced massive pressure from the seller’s side, as the Biden-Harris Administration has pledged to lower the costs of drugs for American families.
After surging high in the correction phase until August 24, 2023, the MRK stock faced rejection from the 112.02 resistance level, and the price reverted downwards. MRK stock price is currently experiencing a downtrend while forming substantial lower lows and highs.
Moreover, MRK stock price has been printing a bearish candle for the past 5-days, and the 200-day EMA has crossed the price negatively. However, another significant moving average has already crossed the MRK stock negatively, favoring the bearish sentiment during the downtrend.
If the current bearish trend remains constant, there is a high probability of further meltdown of the MRK stock price toward the previous support level of 104.40. On the other hand, if the price faces a short-term pullback despite the current drop, the price might hike toward the 107 mark.
Q2-2023 Consensus Of Merck & Company Inc.
On August 1, 2023, Merck & Company Inc. announced its 2nd quarter financial report, which uplifted the stock about 4% on Q2-23 release day. The quarterly data shows that reported earnings of -2.06 per share have performed better than the estimated -2.18 EPS by the surprise of 5.53%.
Moreover, the reported revenue of $15.03 Billion has surpassed the estimated revenue by 4.11%, whereas the estimated revenue was $14.44 Billion.
Will MRK Stock Melt Towards The $103 Mark?
The Bollinger Bond of MRK stock has narrowed recently, showing decreased volatility in the market. The current candle is trading below the lower band. Meanwhile, the candle top is trading below the SMA line, which indicates immense weakness and a stronghold of sellers in the market.
The Relative Strength Index (RSI) has been hovering below the 50 mark since September 13, 2023. The RSI is at 40.18, indicating a rise in sellers’ participation in the market. However, the CMF score of -0.15 denotes immense weakness in the market.
Conclusion
The recent development by the Biden administration under the Inflation Reduction Act (IRA) has drastically affected the MRK stock price. However, the recent meltdown of stock prices reflects the huge involvement of sellers, which diverted the price action from the past downtrend. Investors and traders should look for selling opportunities as the technical parameters suggest the same.
Technical Levels
Major resistance: $119.65 and $117.08
Major support: $101.75 and $102.44
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.