Possible Rebound for CVS Health Stock on the Horizon

CVS Health Corp Stumbles as Medicare Advantage Payment Rates Miss Expectations: Market Insights

Yesterday, health insurance stocks experienced a decline due to lower-than-expected Medicare Advantage (MA) payment rates. This news also impacted CVS Health Corp (NYSE:CVS), 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.

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. For those considering buying the dip, it may be worth keeping an eye on these indicators as they can provide insight into the stock’s potential for future gains or losses.

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