Blue-Chip Drugmaker Stops On Latest Covid Treatment Data

Merck & Co reported updated data from an advanced study of its investigational drug Covid-19

Although most Covid-19 treatment stocks are increasing this morning, following news of a new Covid-19 variant, pharmaceutical giant Merck & Co., Inc. (NYSE: MRK) is down 4.3% to trade at $ 78.76 at last check. The First Order name reported updated data from an advanced stage study of its investigational pill Covid-19, which showed a lower rate of effectiveness in reducing the risk of hospitalization and death than observed in a previous study, with a reduction of 30% compared to its previous 50%.

After a bearish spread after its recent all-time high of $ 91.40 on November 4, MRK is struggling to break above the $ 84 zone. Returning to its lowest level since mid-October, the 150-day moving average persists just below as potential support. It should be noted, however, that the stock could rebound in the short term after all this negative price action, based on its Relative Strength Index (RSI) of 27, which is in “oversold” territory.

Analysts are divided on MRK, with seven of 13 covers rated “strong buy” and six rated “lukewarm”. Meanwhile, the 12-month consensus price target of $ 96.17 is a 21.6% premium from last night’s close.

In the options booths, calls have been more popular than usual over the past 10 weeks. The 50-day buy / sell volume ratio of Merck stock of 5.59 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) is greater than 84% of readings from last year.

Today, although calls are still winning in absolute terms, the volume of wagers is double what is generally seen at this stage. The December 100 and 80 calls are the most active so far today, followed by the weekly put 11/26 78 strikes, which expires at the end of the day, and where new positions are bought to open.

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