Possible Rebound for CVS Health Stock on the Horizon

The recent decline in health insurance stocks, including CVS Health Corp (NYSE:CVS), was due to lower-than-expected Medicare Advantage (MA) payment rates. This news caused a 7.2% drop in CVS shares, the largest daily percentage loss since August. However, 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 trendline.

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 and an overall downward trend of -5.7% since the beginning of the year.

By Samantha Johnson

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