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 10, 2000

Merck finished the week down fractionally after a volatile week of trading. The world's second largest pharmaceutical company is scheduled for its annual check up from Wall Street next week. Analysts will be looking at which products MRK plans to unveil in the coming year and will also delve into the company’s financial expectations. Investors may have delayed their decision to buy or sell until next week's show and tell is complete. On Friday, the stock was turned back at its 10-dma at $91.45 before falling in the afternoon session. In the coming week, we will look for light support for the stock at $88.00 (its recent consolidation area). Resistance is stacking up, first at the 5-dma at $90.42, then the 10-dma at $91.45. The election quagmire has thickened with an all county manual recount ordered in Florida, so expect more volatility in the near term as drug stocks are considered “Bush plays”. Keep a close watch on the broad markets for leadership before opening any new plays. We will keep our stop on this play at $87.00.

Picked on November 28th @ $92.63
Change since picked -3.07
Stop Loss @ $87.00

December 14, 2000

Merck & Company finished Thursday's session off a dollar. On Wednesday, Saloman Smith Barney downgraded the stock from an outperform rating to a neutral. Despite Merck's expectations to meet their earning growth demands for the coming year, skeptical analysts, like the one at Smith Barney, are voicing their concerns. The good news is that the conviction to sell is lacking. On Thursday the selling occurred on volume of only 3.5 million shares, well below Merck's three-month average of 6 million. Still, Merck remains in our crosshairs as a split candidate. An announcement could come with earnings next month. Merck now has support at $91.00, where the 5-, 10- and 20-dma's are converging. Resistance will be felt overhead at $92.00 and $96.00. Wait for market confirmation before entering a new play. Look for support from the Dow Jones Industrial Average (INDU) and the AMEX Pharmaceutical Index (DRG) before considering a new position. We will keep our stop loss at $87.00 until further notice.

Picked on November 28th @ $92.63
Change since picked -1.63
Stop Loss @ $87.00

December 12, 2000

Merck officials met with analysts on Tuesday to discuss the company's earning forecast for the coming year. In a press release, Merck said it expects to hit Wall Street's fourth-quarter consensus earnings estimate of $0.73 to $0.76 a share. Merck also said it expects to meet analyst's estimates of $3.15 to $3.25 a share in the 2001 fiscal year. The company's shares reacted modestly on to the news, finishing up $0.75. Tuesday's modest gain came on average trading volume of 5.9 million shares. Looking at the chart, we note that support is at the 5-dma at $90.45 and then down at $88.00, which is recent consolidation. Resistance should now pose a threat at $92.00 and up near the recent high at around $96.00. Look for the Dow Jones Industrial Average (INDU) and the political arena for confirmation before engaging in a new play. We will keep our stop at $87.00.

Picked on November 28th @ $92.63
Change since picked -1.26
Stop Loss @ $87.00