Merck's 32% rally reflects strong fundamentals, particularly Keytruda's revenue growth, but valuation metrics suggest limited upside. Technical indicators show overbought conditions, warranting caution.

Market sentiment is mixed; while Merck outperformed peers recently, bearish views persist due to concerns over post-pandemic demand. Short-term momentum is positive, but long-term trends remain uncertain.

Long-term risks include patent cliffs for Keytruda and pipeline dependencies, but strong R&D and diversification mitigate downside. Outlook remains cautiously optimistic with a 3-5 year horizon.

RSI and MACD signals indicate short-term bullish momentum, but volume trends suggest potential reversal. Support at $115 holds, but resistance at $125 may cap gains.