| The 8-day EMA is at $117.64. The 20-day EMA is at $117.33. The price is above both. EMAs are stacked on the daily and weekly charts. EMAs, or exponential moving averages, track the recent direction of a stock by weighting newer prices more heavily. When shorter EMAs stack above longer EMAs, buyers have been consistently entering at higher levels over multiple timeframes. That is a trend. The 200-day SMA, the long-term floor where institutions tend to defend positions, is at $95.80. That is 22% below the current price. MRK could give back a lot of ground and still be in an uptrend. If MRK closes below the EMA 20 on volume, the trend read changes. That is my line. The coil is loaded. After running from $73 last year to the $117 range, MRK has been consolidating for several weeks. Tight range. EMAs catching up to price. This is the setup before the setup. Consolidation after a trend move is how a stock loads energy before the next leg. I am not interested in chasing this after it moves. I want to be positioned when it starts. The consolidation has to hold. If it breaks down instead of up, I step away. The squeeze is compressing. Bollinger Bands are tightening inside the Keltner Channels on the daily chart. That is the squeeze. Bollinger Bands measure how tight price movement has become relative to recent history. Keltner Channels measure a broader range based on average daily movement. When the Bands compress inside the Channels, volatility has reached a coiling point. The release tends to match or exceed the move that preceded it. The RSI is at 52. Not overbought. The squeeze fires with room to run. When the squeeze fires in the direction of the trend, that is the highest probability setup I know. MRK is refusing to follow the market lower. The S&P is down five straight weeks. The Nasdaq is in correction. Most of the names on my list are sitting below their EMAs. MRK is up nearly 12% year to date and up on the week. When a stock holds trend during a broad selloff, buyers are defending that name specifically. It is not riding a rising tide. It is holding while the tide goes out. Healthcare holds during uncertainty because people do not cancel prescriptions when oil goes above $100. That demand shows up in the chart before it shows up in the headlines. Relative strength in a weak market is the filter. It tells me this name is worth the wait. Your Action Plan I have no position. But the trigger is a clean close above the consolidation range on expanding volume. That is the squeeze releasing in the direction of the trend. The prior 52-week high at $125.14 is the first target. If you do take this, I would place the stop below the 20-day EMA at $117.33. If MRK closes below that level on volume, the setup is done.. Entry condition. Target. Stop. These should all be defined before you place a single order. If MRK seems like too slow a trade for you, I'm actively trading shorter term sets up my Daily Profits Live Room. Click here to learn more. | 
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