Conclusion, Investment Implications, Strategy

CVS Health Corporation (CVS) appears to be resuming its late March advance following the confirmation of a bullish chart pattern on May 26th.  A sustained rise above the $62.73 area would help confirm this and target an additional 18% rise to $78.00 per share.  This is an Asbury Momentum idea.

Analysis and Rationale

CVS Health Corporation (CVS) provides health services and plans in the United States. The company’s Pharmacy Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, mail order pharmacy, specialty pharmacy and infusion, clinical, and disease and medical spend management services.  Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans, and individuals.  Its Retail/LTC segment sells prescription and over-the-counter drugs, beauty and personal care products, and cosmetics; and provides health care services through its MinuteClinic walk-in medical clinics.  The company’s Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. The company was founded in 1963 and is headquartered in Woonsocket, Rhode Island.

Chart 1 below plots CVS daily since Q4 2019 and shows that price has recently confirmed a bullish chart pattern, an inverse head and shoulders, that targets an additional 18% rise to $78.00 per share.  This target  will remain valid above the $62.73 area.

Chart 1

Table 1 below shows that, considering the aforementioned upside target and a protective stop placed below the $62.73 area, a long entry price of $65.90 would provide a 1:3.8 risk/reward ratio (risking $1.00 to make $3.80) with an initial risk of 4.8%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.