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 21, 2000

On Wednesday, Merck served as a safe haven for battered investors. Both major indices tanked with the tech sector getting hit especially hard on slowing profit expectations. Investors parked their money in defensive utilities and pharmaceutical stocks, which are among the year's best performers. Merck gapped open by $1.50 on Wednesday and appeared to be making a run on its recent 52-week high at the $96.00 level. The stock topped out for the day at $95.13 on 50 percent greater volume of 9.6 million shares. On Thursday, the stock took a breather and gave back some of yesterday's gains. We'll be watching closely as the stock enters earning season to see if it announces a stock split late January. At Thursday's close, the stock now has technical support at $92.00, then the 20-dma at $91.30 and finally down at the 50-dma at $88.46. Resistance will likely be encountered at $94.00 and $96.00. Look for good volume and leadership in the Dow Jones Industrial Average (INDU) and the AMEX Pharmaceutical Index (DRG) when considering new play opportunities. We will keep our stop loss at $87.00.

Picked on November 28th @ $92.62
Change since picked -0.13
Stop Loss at $87.00

December 19, 2000

Pharmaceutical giant Merck & Company finished strongly on Tuesday, which is a minor miracle considering the stock actually gapped down at the open of trading and kissed of the 50-dma at $88.00 before moving higher. The rally in pharmaceutical stocks that was forecasted to happen if Bush won the White House has yet to materialize. The consensus seems to be more along the line of "don't do drugs," as MRK is joining a host of other stock in those sectors that have lost ground. While the stock did close up today, we are regarding the gains as suspect since they occurred on low volume. The normal three-moth trading volume has been about 6.2 million shares, yet only 4.9 million exchanged hands on Tuesday. MRK now has support at the 20-dma at $91.14 and then the 50-dma at $87.81. Expect some resistance just above at $92.00 and then incrementally on up to $96.00. Earnings are now just weeks away, scheduled for January 19, and may produce a split at that time. Until then, we are waiting and watching for an overall bullish trend to emerge not. We will continue to watch the (INDU) and the AMEX Pharmaceutical Index (DRG) for leadership. Our stop remains at $87.00.

Picked on November 28th @ $92.62
Change since picked -1.13
Stop Loss @ $87.00

December 17, 2000

Despite an ugly market on Friday, Merck finished the week down less than a dollar. Merck lost only 62 cents on the day but recorded huge volume. The stock traded 10.6 million shares, well above its 3-month average of 6.2 million shares. This could have been due to triple witching, but bottom line is that the stock is holding up well. Expect the trading volume to subside across the board going into the holiday weekend. On Thursday, after Gore conceded, the market expected the drug stocks to rally. A "Bush rally" was so widely anticipated by the market, however, that when the Texas Governor finally won, the market sold the news. Looking at the chart, we note that the trading range for MRK has grown much smaller. In fact, MRK appears to have formed a "wedge" pattern, which began in late November. We will watch to see how the stock moves when it reaches the pinnacle of this wedge. The stock has support at the consolidation area at $90.00 and then back at the 50-dma at $87.22. Resistance has been pervasive at $92.00. 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.X) before considering a new position. We will post our stop loss at $87.00.

Picked on November 28th @ $92.62
Change since picked -2.24
Stop Loss @ $87.00