Merck & Co., Inc. is a pharmaceutical company that discovers, develops, produces and markets human/animal health products and services. Merck also provides pharmaceutical benefit services. For the nine months ended 9/30/00, sales rose 22% to $28.90B. Net income rose 17% to $5.06B. Results reflect sales growth of prescription arthritis medicine and other newer and established products,partially offset by higher materials and production costs.

December 3, 2000

Merck finished the week with a small gain in the face of high market volatility. The pharmaceutical behemoth traded as low as $89.13 on Friday. Volume came in at 7.5 million shares, much higher than the three-month average of 5.8 million shares. Merck is currently in our cross hairs as a split candidate. The company has 2.3 billion shares outstanding and 5.4 billion shares authorized, more than enough for a 2:1 split. With a strong history of previous stock splits, the only thing we need now is an announcement from the BOD. We are looking for an announcement with earnings in January. Earlier in the week analysts from Goldman Sachs and CS First Boston upgraded the stock to "Recommended List" and "buy" respectively. The technical picture looks like this: support can now be measured at $90.00 and then at $88.00. Moving averages are not reinforcing these support levels, so consider them light. Resistance is up at the 10-dma at $91.35 and the 5-dma at $92.50, and then the recent high of $96.69. Consider a quick pullback to a support level as a possible entry point if immediately followed by an up surge on good volume. Look for market confirmation coming from the Dow Jones Industrial Average (INDU) and the AMEX Pharmaceutical Index (DGX.X). We will keep our stop at $87.00 on this play.

December 7, 2000

Pharmaceutical giant Merck posted a modest gain on Thursday in the face of a negative market. Despite both major indices finishing down for the day, MRK bucked the trend and added a buck and a half by day's end. Next week MRK will receive its annual check-up by Wall Street when it will host a meeting to showcase drugs in the pipeline and present its financial outlook for the coming year. Anxious investors continue to use the political barometer as they're most immediate measurement for buying and selling stocks. Perhaps some presidential resolution coupled with a promising forward-looking earnings report from MRK will bolster investor enthusiasm in the stock. At the close of trading on Thursday, MRK has support at the 5-dma at $90.64 followed by $88.00, both of which are consolidation points and should be viewed as weak support levels. Resistance will pose a threat at the 10-dma of $91.44, $92.00. A bounce off a support level on the heels of a politically induced market rally might make a nice entry point for a new play. Match entry points with volume above the three-month average of 5.9 million shares. We will keep our stop at $87.00. Please visit our Current Play section for changes to our stops.

Picked on November 28th @ $92.63
Change since picked -1.57
Stop Loss @ $87.00

December 5, 2000

On Tuesday, shares of Merck shed 2% despite a massive broad market rally. Merck actually gapped up at the open of trading thanks to the election news that put George W. Bush closer to the White House. Throughout the day, however, investors slowly sold the stock, taking it as low at $88.44 intra-day. Tuesday's trading volume was recorded at 7.8 million shares, which represents a 34% increase over the average of 5.8 million shares. Merck, which is widely known for being a world leader in pharmaceutical sales and distribution, would actually benefit from a Bush Administration, so we find it curious that investors sold the stock. Looking ahead, we'd like to see the momentum change to the upside with volume to compliment the rise. The technical perspective puts current support at $90.00 and then at $88.00 (recent consolidation ranges). Please note these support levels should be regarded as light since they are not associated with a major moving average. Resistance will likely challenge the stock at the 5-dma of $92.03 and up at $94.00. Look for leadership in the INDU and the sector for confirmation when considering a new play. We will keep our stop loss at $87.00 until further notice. Please visit our IN PLAY section for a list of all stops.