Hi Shoppers,

With all this market craziness, Merck (Ticker: MRK) has had a nice rally:

Coming off that down trend with a beautiful bullish engulfing candle on Sept. 22, MRK has rallied from $84.55 up to a high on Friday of $93.36.

Although Thursday’s candle looks bullish, Friday has created a doji which could be signaling a change in that up trend.

Of course, I will wait for a confirmation of MRK opening and trading lower than Friday’s lows before I hop in.

I am looking for a quick move lower here, and earnings are on Oct. 27 … so I am looking at the Oct. 21 expiration date:

I like Friday’s 92 puts for under a dollar. These will decay quickly, so take your profits on the sharp move lower.

I think it is possible for MRK to try and close that gap and trade down to $88.30, which coincides with the 50 day moving average.

Be sure you have that confirmation before making the entry.

Thanks for Reading … See You Next Tuesday.

Licia Leslie