April 14, 2024 2:44 pm
Possible Rebound for CVS Health Stock on the Horizon

Yesterday, health insurance stocks experienced a decline due to final Medicare Advantage (MA) payment rates that were lower than expected. This news also had an impact on CVS Health Corp (NYSE:CVS) stock, which saw a 7.2% drop – the largest daily percentage loss since August. Despite a modest recovery today, with shares up 0.7% at $74.37, the recent pullback has brought CVS close to its 200-day moving average, a trendline that has historically been bullish.

For those considering buying the dip, Schaeffer’s Senior Quantitative Analyst Rocky White notes that CVS has been within one standard deviation of its 200-day moving average before, which resulted in a 3% gain on average one month later. Additionally, the stock’s 14-day relative strength index (RSI) of 29.4 suggests that it is oversold and could see a short-term bounce. Before yesterday’s drop, CVS had been on an upward trend, with only three daily losses since March 14, though overall the stock is down 5.7% since the beginning of the year.

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