MRK is reversing its month-and-a-half downtrend and breaking out of a descending channel after a pullback from around 157; RSI momentum is turning up, and a long-term bull flag suggests about 170, with a possible breakout to new record highs of 165-170 next month. Not guaranteed; risks remain; earnings due soon.

Merck is your first choice and truly outperforms the market today. Its stock is up by 2%. They have an earnings announcement due at the end of this month. I am impressed with " Merck" here because it has started to reverse the downward trend it has been in for the past month and a half or so .

It looks like we may be breaking out of that down channel today, and it will be interesting to hear Ben's opinion , but I think there is a possibility of seeing higher price action now that the company has found some stability.

you'll see that Merck has been one of the strongest performers in the healthcare sector ever. You may notice some sideways movements in the middle of the year, but we have now seen the backdrop of a very strong rally since the July and August earnings period.

Then there was a slight pullback from some of these earlier highs around the 157 area or so. The descending channel that Dan described, we are now seeing a slight breakout of this morning, as investors who have been monitoring the decline in their concentrated technical positions look for some Merck products here on the shelves as well as in their investment portfolios.

You see this breakout above the Qatari resistance level. What reinforces this is this shift in momentum. You see that the Relative Strength Index (RSI), which is the momentum indicator we often use, has been falling with the price, and is now breaking the diagonal downtrend line.

This suggests that there may be a shift in momentum. Perhaps there is some power here.

it looks much more interesting because you have a perspective of a long-term "bull flag" bounce, which, from a measurement perspective, would push the price to around the 170 mark.

Of course, this is not a guarantee. That's just what technical analysis might suggest here, Marley.

Yes, I think, as you know , while it's regaining its balance here, for me, the process of thinking about the trading example was to identify the risks while still providing the ability to capture the continuation of this move down to that area that Ben referred to.

So, an example of today's trading is buying a call spread for November 150-165. You can buy it for about $5.35. The risk-to- reward ratio in this trading example is two to one, but again it allows for a continuation and a possible breakout to new record highs reaching the 165-170 level next month.

It also includes the announcement of earnings, and the final part of this trading example is identifying risks in case of a decline.