Hi Traders,

Here’s what I’m seeing this week. My call pick is a healthcare stock that cleared three levels in one session today. It has a big catalyst later this month, so write that date down.

My put pick is a chip stock everybody loves. It just closed below a key line on my chart, and there’s an open gap underneath it.

Let’s get into it…

My favorite stock for calls this week is Merck (MRK):

It has pretty much closed the gap (price came back to fill the hole it left on the chart on August 19) and bounced off that support. Today it cleared its most recent highs, the 50-day moving average and the 20-day moving average (the average closing price over the past 50 and 20 trading days). That shows momentum.

The MACD (a momentum gauge built from two moving averages) is just crossing zero on the histogram, which is also bullish.

My price target is $152.80. Use a close back below the 20-day moving average as your stop loss.

Merck goes by MSD outside the U.S. and Canada, and most of its story runs through one drug. Keytruda, its cancer immunotherapy, is approved across a long list of tumor types and brought in $31.7 billion in 2025. That’s almost half of Merck’s $65 billion in total sales.

The rest of the business has been mixed. Gardasil, the HPV vaccine, fell 39% last year to $5.2 billion. Newer products are picking up some of that slack, with Winrevair for pulmonary arterial hypertension at $1.4 billion and the Capvaxive pneumococcal vaccine at $759 million.

Animal Health is the quiet part of the company. It sold $6.4 billion last year, up 8%, behind livestock products and the Bravecto flea-and-tick line for pets.

Wall Street’s big question is life after Keytruda, and Merck answers part of it in Madrid. At the ESMO cancer conference (October 23 to 27), Merck and Moderna present full Phase 3 melanoma data on intismeran, a personalized mRNA therapy built from each patient’s own tumor and paired with Keytruda. They already said in August the trial hit its main goal.

Merck is also bringing Phase 3 data on sac-TMT, an antibody-drug conjugate (a targeted drug that carries chemo straight to the cancer cell), in endometrial cancer. Back in May it became the first drug of its kind to improve survival in a global Phase 3 trial in that setting.

The stock topped $155 in late August, the same month the melanoma trial hit its goal. It pulled back after Merck withdrew an accelerated filing for a lung cancer drug on September 25. Meanwhile, Merck is putting more than $70 billion into U.S. manufacturing and research, including a $3 billion plant in Virginia and a new Keytruda plant in Delaware.

My favorite stock for puts is Advanced Micro Devices (AMD). It’s closing a gap it created back on September 21st:

That takes the stock down to $559.05. It’s following my pitchfork (three parallel lines I draw off major highs and lows to map a stock’s path) beautifully and has now closed below the median line, the middle of those three, which is bearish. Both MACD and RSI (another momentum gauge) are bearish.

Use a close back above $573.75 as your stop loss.

AMD designs chips and hands the manufacturing to Taiwan Semiconductor (TSMC). Its EPYC processors run data center servers, Ryzen goes into PCs and workstations, and Instinct is the AI accelerator it built to take on Nvidia. It also makes Radeon graphics, custom chips for game consoles, and the programmable chips it picked up when it bought Xilinx.

Few stocks have run like this one. AMD is up about 148% over the past six months, and its 52-week range stretches from around $188 to $658. It’s taken real share from Intel in servers and landed big GPU deals with OpenAI and Meta.

What catches my eye is how it handles good news. AMD beat estimates in August and dropped about 9% after hours. On Monday it rolled out Helion, a rack built to run AI agents on up to 32,768 EPYC cores, and the stock traded down about 3% that afternoon to around $590.

Every week I bring a stock I love and a stock I’d leave to the Ticker Highlight Show, and Mark, Andrew and Hans each bring theirs. Then one of those picks gets turned into a high-probability options trade you can follow. You’ll want to see which name made the cut.

Tap here to catch this week’s Ticker Highlight Show.

Trade Accordingly,

Licia Leslie