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Forget Apple: 5 More Big Stocks to Trade for Gains


First up is pharma giant Merck (MRK - Get Report), a stock that's having a solid run in the past six months. Shares of the $117 billion drugmaker are up close to 17% over that time. A technical pattern in shares right now points to even more upside in shares.

The pattern to watch in Merck is an ascending triangle, a formation that's identified by horizontal resistance to the upside of shares at $39 and uptrending support below. Essentially, as MRK bounces in between those two price levels, it's getting squeezed closer and closer to a breakout above resistance; that breakout above $39 is our buy signal.

The ascending triangle in MRK tells us two important things: first, resistance indicates that there's a glut of supply of shares at the $39 level. In other words, $39 is a price where sellers have historically been more eager to sell and take gains than buyers were to buy. The other important factor in the ascending triangle is uptrending support -- it tells us that, at this point, buyers are in control of shares. The high-probability trade comes when that glut of supply gets absorbed and shares push through that price level.

Even though Merck isn't a strictly textbook setup, the trading implications of those two levels look strong. When MRK breaks out above $39, I'd suggest putting a protective stop in just below the 50-day moving average.

Merck shows up on a list of 10 Dividend Stocks Held by Highly Rated Fund Managers.

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BMY $66.05 0.00%
EIX $63.82 0.00%
MRK $57.98 0.00%
NWSA $17.10 0.00%
X $24.01 0.00%


DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

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