I have purchased stocks of Merck at an average price of Rs 1940. Since the market is correcting heavily, I want to know how this stock will fare in the short-medium term?
- Apoorva Shah
HOLD MERCK WITH STOP LOSS OF RS 2480
Merck is currently trading at Rs 2799.95. Its 52-week high/low stand at Rs 3554.40/Rs 1015.50 made on September 3, 2018 and October 17, 2017, respectively. The stock after registering its 52-week high entered into a corrective phase, where the stock took support around its 100-DMA and witnessed a good bounce-back from its 100-DMA, despite the correction in the market. Going forward, the zone of Rs 2480-2540 is a crucial support area for the stock as it is the confluence of 100-DMA, which is currently placed at levels of Rs 2540, and the 78.6 per cent retracement level of rally from August to September (2195-3554.40). The stock may find resistance around the level of Rs 3000 as defined by the channel pattern; however, closing above this pattern would infuse further bullishness and could take the stock towards its all-time high levels. Considering the above factors, we would advise you to hold the stock with stop loss of Rs 2480 for an immediate target of Rs 3000, followed by Rs 3550 in the medium term.