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

January 4, 2001

Upon the Fed announcement that it was cutting short-term interest rates by 50 basis points, Merck immediately sold off and quickly hit our stop loss at $91.00. We are out of this play with a small loss and will watch MRK for better trading opportunities in the future. Since the stock continued to sell-off on Thursday, we are pleased that the discipline of using a stop order has effectively saved us some money.

Picked on November 28th @ $92.63
Profit/Loss -1.63 (-2%) (Stopped out Wednesday @ $91.00)
Best Profit +4.06 (+4%)

January 3, 2001

Hit stop, write-up to follow.

January 2, 2001

Despite a decent morning rally on Tuesday, Merck & Company was forced to take the path of least resistance. During the first hour of trading in this New Year, MRK rose to an intra-day high of $95.25 by 10:30 EST, but then the selling ensued and MRK was dragged lower closing at $93.00 for the day. The trading volume was recorded at 6.0 million shares at the end of trading. This number is roughly in-line with what the stock normally trades at based on a three-month average. Despite some very bold and very bullish comments from some of Wall Street's analysts for the coming year with regard to the market in general, we are maintaining a wait and see attitude for now. MRK is due to report its fourth-quarter earnings on January 19th. Ahead of that report we'd like to see a bullish pattern emerge with volume to support the ascent. Look for the stock to hold support at the 10-dma at $92.39 and then at the 20-dma at $91.57. Resistance will pose a threat at $94.00 and then at $96.00. Continue to watch for positive momentum in the Dow Jones Industrial Average (INDU) and the AMEX Pharmaceutical Index (DRG.X) when considering opening a new play in MRK. We are going to keep our stop on this play at $91.00.

Picked on November 28th @ $92.63
Change since picked +0.37
Stop Loss @ $91.00

December 31 2000

Merck & Company rewarded shareholders by appreciating by 36% for the year 2000. The stock certainly had its low points though. At one point during the March sell-off, MRK traded as low as $52.00. We think it impressive that from that low point, MRK has nearly doubled for the year. Additionally, the stock made a noble effort to close the year on a "high" note as it came within 75 cents of achieving a new 52-week high on Friday. The final day of trading for 2000 saw only 3.7 million shares exchanged for MRK, substantially below its 3-month average volume of 6.2 million shares. We will be looking for the upcoming earnings reports to possibly induce more money to flow into the drug sector. If tech earnings turn out to be as low as predicted, the drugs might be the beneficiaries of still more money seeking safety. We remain hopeful that the company will announce a stock split with earnings as well. Next week, look for MRK to rise on good volume when considering a new play opportunity. Resistance should be encountered at $96.69, last years 52-week high. Support should hold at the 5-dma at $92.85 and then at the 20-dma at $91.45. Continue to watch the Dow Jones Industrial Average (INDU) and the AMEX Pharmaceutical Index (DRG.X) when considering opening a new play in MRK. We are going to keep our stop on this play at $91.00.

Picked on November 28th @ $92.63
Change since picked +1.00
Stop Loss @ $91.00