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Merck & Co. headquarters in Whitehouse Station, N.J.

Daniel Hulshizer/AP

From $61.62 in 2008, Merck & Co. Inc. declined to $20.05 in 2009 (A-B), rallied to $41.56 in 2010 (C), then settled in a trading range between $30.50 and $39.50 to produce a bullish technical pattern known as a V-Extended (dashed lines).

Merck had a breakout from this range recently and rallied to a high of $45.17 (D) to signal the start of a new up-leg.

A minor pullback may occur but only a decline below about $39 would be negative. Point & Figure measurements provide targets of $49 and $54.

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The large V-Extended formation (dashed lines) supports higher targets.

Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.

Chart source: www.decisionplus.com

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About the Authors
Senior Technical Analyst at Phases & Cycles Inc.

Monica Rizk, Senior Technical Analyst, has a Bachelor's degree in Business Administration and completed the Canadian Securities Institute course. She has been with Phases & Cycles since September 2000 and specializes in the research of Canadian and US stocks using Point & Figure as well as bar chart analysis. More

President of Phases & Cycles Inc.

Ron Meisels, President, Phases & Cycles Inc., has been active as an Analyst since 1971. He was Vice President and Director of Technical Research of Nesbitt Thomson (now BMO Nesbitt Burns) from 1982 to 1990. He was ranked among the top three technical analysts by Canadian Institutions for six consecutive years (Brendan Wood Survey). More

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