Merck Stock Could Be the Right Play for Bullish Traders

The equity is outperforming on multiple fronts

Jun 7, 2022 at 11:49 AM

Merck & Co., Inc. (NYSE:MRK) has just pulled back to the $90 level after its recent all-time high, a level that served as prior resistance. Plus, the stock is outperforming with a 17.3% year-to-date gain and a 21.7% year-over-year lead.

MRK Chart WT June 7

Furthermore, MRK's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 95% of readings in its annual range, while its 10-day put/call volume ratio is higher than 98% of readings. This shows puts being picked up at a much faster-than-usual rate relative to the past year.

Short interest is on the rise, adding 27.1% during the most recent two-week reporting period. Finally, our recommended October 87.50 call has a leverage ratio of 8.3 and will double in an 11.4% rise in the underlying stock.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this MRK commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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