Buy Alert: November 5, 2013
Buy Alert: November 5, 2013
Trade Details
Buy Merck (MRK) December $45 Calls for $1.18 or better
Why?
Our first of two trades today, pharmaceutical giant MRK has been underperforming the broader market. The company has at least one promising vaccine on the way (in Phase III) and several others farther down the pipeline. Yet, the stock sold off after weaker than expected profits from diabetes drug sales.
As usual, it’s a temporary situation for an enormous drug manufacturer like Merck. And now, the share price has dropped below all three of its major moving averages.
MRK options are cheap, so we’re going to buy the at-the-money calls and plan for a move back towards the 50-day moving average.
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Category: OTW Buy Alerts
