MRK: Avoid Value Trap
July 27, 2008 8:20 PM
On 07/22, Merck (MRK) gapped lower and has since risen slightly. In fact, it has slightly exceeded the gap down high. There is no clear indication of a low and the gap “might” fill all the way, or it may reverse prior to the fill. Some may be confused as to whether this gap was bought, or sold. This gap was sold and is an avoid anything long, IMO.
It is clearly a short below $38.34, but I would be very surprised if it even comes close to that area before falling back. I am not saying it is a flat out short, as if it goes higher, some shorts may cover. However, you clearly cannot be long it with no clear reference point, IMO.
Remember my motto: clarity and agreement. We have neither on this stock as it is rising after a gap that was sold. Therefore, it is an avoid.
Comments
Got something to say?
-
Recent Commentary
- Site Update: It Has Been Fun, But Closing It
- Morning Call: Open Sold
- Market Recap: GM News Was Not Really A Deal, Dow Low Cleared Late and Down She Goes
- Morning Call: Open Sold, Dow 7773
- Market Call Revisited: Sell Asia
- Market Recap: Not Good
- Market Update: Doesn’t Look Good, 818 and 826
- Market Recap: Buyers Above 818
- Morning Call: Open Gap Bought
- Market Recap: Buying On A Big Number, Now What?
- Morning Call: Still Uncertainty
- Market View: GM Holds The Cards
- Stock Charts VS Market Charts
- Market Recap: Somewhat Predictable, Low Came Where I Said Was Likely
- Morning Call: Unclear, Risk Is High
- Huge Rally: Now What
- Market Comment: Does News Even Matter?
- Market Recap: Close Day Craziness
Our Mascot Trading Goal: Ferrari 599
