Shares of Merck (MRK) - Get Report   are flip-flopping between negative and positive territory Friday, even though the health care giant beat the Street's second-quarter revenue estimates and posted a 75% surge in profits.

Investors seemingly can't make up their mind, but they would do well to add these shares now on any near-term pullback. The 3.14% annual dividend yield is a nice bonus.

Merck continues to enjoy strong growth in its lung cancer drug Keytruda and in Januvia, which is used to treat diabetes. The company has a healthy pipeline to drive its earnings for several years.

The chart below, which is courtesy of TradingView, shows some weakness. But the buying opportunity might not last long.

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Merck stock currently trades at around $58 per share. The stock has risen 10.8% year to date and is flat over the past year, compared with a 6.2% year-to-date rise in the S&P 500 (SPX) index and a 4% year-to-date rise in Health Care SPDR ETF (XLV) - Get Report .

The shares hit a wall when they reached $59 earlier in the month, which followed a fall back below the 20-day moving average at $58.87 (the blue line). This signaled that traders believe that was the peak of the climb, especially with the earnings results coming due.

But the results were spectacular. The fact that the stock has not moved higher indicates some valuation concerns on the part of traders. But that's a mistake.

At $58, the stock is priced at just 15 times fiscal 2016 estimates of $3.72 per share. That is cheaper than both Johnson & Johnson (JNJ) - Get Report and Pfizer (PFE) - Get Report . Those companies don't have Merck's strength in the pipeline.

On a technical basis, Merck stock looks poised to break above $59 in the next few weeks. It has support at around $57.68. If the stock breaks higher, it could regain its 2001 high of around $66 by the end of the fourth quarter.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.