Possible Rebound for CVS Health Stock on the Horizon

The recent decline in Medicare Advantage (MA) payment rates has negatively impacted health insurance stocks, including CVS Health Corp (NYSE:CVS). Yesterday, CVS experienced 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 trendline.

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

By Aiden Johnson

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