Merck & Co (NYSE: MRK)

On Tuesday before the market opened, shares of Merck & Co ($MRK) were gapping up on news of positive results from their lung cancer trial.

Merck’s lung cancer treatment, Ketruda, performed better than expected in a late-stage, Phase 3 trial which has “significantly improved overall survival and progression-free survival”.

This is a big step in the right direction and has investor excited for its potential as you can see by the price action this morning with a 5% gap up from Friday’s close.

Merck Technicals

You can see in the 5-minute chart above that shares ripped higher following the breaking news this morning. Shares are looking to gap up about 5% from Friday’s close of $58.66 with shares currently trading around $61.50.

This is a big jump but we really want to see shares hold the 200-day moving average that is currently sitting at $60.21 to prove that buyers are in control.

Looking at the daily chart above you can see some important levels that will need to be watched. $61.81 is the first big level of resistance we will need to watch with support coming in at $60.55 at the bottom of that gap. The 200-day moving average should also act as support but if shares sell off below that level then we really don’t have anything until the high of Friday which was $58.81.

Keep this stock on your radar as there should be plenty of opportunity today with high relative volume and volatility.

Executive Comments

“KEYNOTE-189 showed significant improvement in overall survival and progression-free survival for patients receiving KEYTRUDA in the first-line setting in combination with traditional chemotherapy, compared with those receiving chemotherapy alone,” said Dr. Roger M. Perlmutter, president, Merck Research Laboratories. “We are deeply grateful to the KEYNOTE-189 patients and investigators for their important contributions to this landmark study, and we look forward to presenting the data in the near future.”