Big Pharma MERCK & CO in SERIOUS TROUBLE !FUNDAMENTALS:
Merck & Co seem to be in serious trouble after a 'Big Pharma Bombshell' where Federal Judge Beth Labson Freeman of San Jose finds Merck lied in patent trial to both a business partner (Gilead Sciences Inc) and lied to the court itself, overturns $200 Million verdict ! (Re: hepatitis C Drug).
Source:
LA Times Article here:
www.latimes.com
Court Document here:
assets.documentcloud.org
Judge Stated "Merck's misconduct includes... misusing Pharmasset's confidential information..., and lying under oath at deposition and trial" - Federal Judge Beth Labson Freeman.
One example of this was "The edvidence examined by Freeman strongly suggests that Merck flagrantly manipulated the patent process to gain unfair advantage." - Michael Hiltzik, LA Times.
AND
"Adding to the temerity of the big drugmaker, it originally sued Gilead for $2 billion before having to settle for $200 million. Now, pending appeal, it won’t get even that much for its patent claims, and its reputation for integrity will carry a value of less than zero." - Michael Hiltzik, LA Times.
TECHNICALS: (Daily and Weekly Charts)
A Gartley pattern has been confirmed and completed as well as breakout from major structure, providing the start of what seems to be an Elliott wave 2 structure in it's infant stages, after completion of a correction and a failed Wave 5 at the top of the chart, where major resistance is located. This initiated Elliott wave count suggests a long-term bearish trend for the pharma company down to significantly low price that would normally be expected.
Ketchup, Mustard, Water and Mayo EMAs have all been breached by the price action as well as TDI showing hints of continued downward movement.
Monthly chart also suggests we are at the start of a Bearish Intermediate Wave 1 which does not look good for the pharmaceutical company.
However, that being said, this is a FANTASTIC opportunity to SHORT the absolute crap out of this stock, in my opinion I see quite significant Profit from Shorting this stock on a 3 ~ 6 month term, possibly even longer if the wave count is confirmed as described on my chart. I'm shorting this stock on the breakout of structure, where most likely this will occur on market open with a GAP. In my opinion this will be a huge profit maker as I'm expecting this bearish price action to continue for significantly long period of time.
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DISCLAIMER: This chart is for sharing and educational purposes only and is not intended to be a signal service or similar.
This chart analysis is only provided as my own opinion, based on my own analysis and comes with absolutely no warranty that this analysis is correct, whatsoever. Do not trade this chart if you do not have your own strategy. Trade only with your own strategy at your own risk. Plan your trade and trade your plan... and IF in doubt, stay out.
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