Pharma Stock's Rally Stalling Out at Technical Resistance

Shares of drug-maker Merck (MRK) stalled on the charts at the early 2024 pivot breakdown level. The equity is also losing steam around resistance at the $120 zone, with the final decent call open interest (OI) level at the 125 strike.
 
There’s a heavy skew toward calls in the options pits. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Merck stock's 10-day buy-to-open call/put volume ratio of 5.09 sits in the 83rd percentile of its annual range.
 

Options are the route, though, with the stock’s Schaeffer’s Volatility Index (SVI) checking in at the 10th percentile of its annual range. Our recommended April put has a leverage ratio of 9.0 and will double on a 10.1% drop in the underlying equity.