Hot Stock's Trend Recap: Merck & Co Inc (NYSE: MRK) – Alpha Beta Stock

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Major US equity indices opened sharply lower on Thursday and pulled back from all-time highs amid uncertainty surrounding the Republican-led tax-cut legislation.

Investors now seemed to have turned increasingly nervous following the Washington Post report on Tuesday, suggesting that Senate Republicans may delay corporate tax cut by 1-year. Senate Republicans are expected to unveil a tax plan today.

Hopes that the US President Donald Trump’s administration will deliver major US tax reforms had been one of the key factors driving the markets higher since the beginning of this year. Hence, if the legislation diverges from the bill put forth by House Republicans could further dent investors’ sentiment and trigger a near-term correction. (Source: FXStreet)

During the opening hour of trade, the Dow Jones Industrial Average was down around 125-points to 23,436, while the broader S&P 500 Index lost nearly 16-points to 2,578. Meanwhile, tech-heavy Nasdaq Composite Index underperformed the broader markets and slipped over 65-points to 6,723.

Stock in Focus: Merck & Co., Inc. (NYSE: MRK)

Merck & Co., Inc. (NYSE: MRK) has grabbed attention from the analysts when it experienced a change of -1.71% in the current trading session to trade at $55.62.

Merck on Thursday declared that the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom (UK) has issued a final appraisal determination (FAD) recommending Cladribine Tablets (MAVENCLAD®) as an option for treating highly active multiple sclerosis in adults. Use of Cladribine Tablets is recommended only if the person has: rapidly evolving severe relapsing-remitting multiple sclerosis, that is, at least two relapses in the previous year and at least one T1 gadolinium-enhancing lesion at baseline MRI or relapsing-remitting multiple sclerosis that has responded inadequately to treatment with disease-modifying therapy, defined as one relapse in the previous year and MRI evidence of disease activity. This decision comes only two months after the European Commission granted marketing authorization for MAVENCLAD® in August 2017.

A total of 2,450,484 shares exchanged hands during the intra-day trade contrast with its average trading volume of 9.26M shares, while its relative volume stands at 1.54. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, Merck & Co., Inc. (NYSE: MRK) stock is found to be 1.54% volatile for the week, while 1.48% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $154.69B and the number of outstanding shares has been calculated 2.73B. Based on a recent bid, its distance from 20 days simple moving average is -7.21%, and its distance from 50 days simple moving average is -11.46% while it has a distance of -12.42% from the 200 days simple moving average. The company’s distance from 52-week high price is -16.74% and the current price is 2.21% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 25.49 together with Average True Range (ATR 14) of 1.03.

Stock’s Valuation:

Past 5 years growth of MRK observed at -7.00%, and for the next five years the analysts that follow this company is expecting its growth at 4.75%. The stock’s price to sales ratio for trailing twelve months is 3.89 and price to book ratio for the most recent quarter is 3.92, whereas price to cash per share for the most recent quarter are 12.93. Its quick ratio for the most recent quarter is 1.20. Analysts mean recommendation for the stock is 2.40. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

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