4 Trade Ideas for Merck: Bonus Idea

• Posted by Greg Harmon
• on July 14th, 2025

Here is your Bonus Idea with links to the full Top Ten:

Merck, $MRK, comes into the week rounding out a bottoming pattern. It has made a series of short term higher highs and higher lows. It has a RSI in the bullish zone with the MACD positive and climbing with the Bollinger Bands® opening higher. There is resistance at 85.25 and 87.50 then 89 and 91.50 before 93.50 and 95.50. Support lower is at 82.25 and 80.50. Short interest is low at 1.4%. The stock pays a dividend with an annual yield of 3.89% and has traded ex-dividend since June 16th.

The company is expected to report earnings next on July 29th. The July options chain shows the biggest open interest at the 75 put strike and the 85 call strike. In the August chain open interest is largest at the 75 put and the 90 call strikes. In the September chain open interest is biggest at the 80 and 60 put strikes and then at the 90 strike on the call side.

Merck, Ticker: $MRK

Trade Idea 1: Buy the stock on a move over 85.25 with a stop at 82.25.

Trade Idea 2: Buy the stock on a move over 85.25 and add an August 80/75 Put Spread ($1.25) while selling the September 95 Call (91 cents).

Trade Idea 3: Buy the July/August 85 Call Calendar ($2.40) while selling the August 75 Put (67 cents).

Trade Idea 4: Buy the September 75/85/95 Call Spread Risk Reversal ($1.45).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into earnings season and the July options expiration week, saw equity markets exhibit continued strength holding at the highs.

Elsewhere, look for Gold to continue to consolidate in its uptrend while Crude Oil drifts up in consolidation. The US Dollar Index continues to drift higher in the short term move to the downside at more than 3 year lows while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue the move higher in consolidation while Emerging Markets continue their break to the upside.

The Volatility Index looks to continue in the normal range making life easier for equity markets to the upside. The charts of the SPY and QQQ are showing strength on both timeframes as they continue to print new all-time highs. The IWM continues to lag the SPY and QQQ in recovery in price but is looking stronger as it moves higher as well. The classic “V” recovery continues to build in all 3 Index ETFs. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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