This is the last week of what's been an incredibly strong earnings season, Jim Cramer told his Mad Money viewers Friday night, as he laid out his weekly game plan. So far, the earnings have been spectacular, Cramer said, and this week promises to be more of the same.
The game plan starts out today when Cramer examines the earnings from CVS Health Corp. (CVS) , which will provide an update on Covid vaccines. Earnings were reported this morning and the stock was up in early trading.
We looked at CVS last month on January 6 and wrote that "Aggressive traders could go long CVS at current levels and on strength to $75 and above. Risk to $67. The $110 area is our price target."
Let's check out some charts.
In this daily bar chart of CVS, below, we can see that prices rallied above $75 and then made a shallow pullback. Traders should be long. CVS made a successful test of the rising 50-day moving average line early this month. The 200-day moving average line also has a positive slope.
The daily On-Balance-Volume (OBV) line has been firming since late October and tells us that buyers of CVS have been mostly more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line and poised to generate a new buy signal.
In this weekly bar chart of CVS we see a positive picture. Strength over $77 should be a fresh upside breakout. The slope of the 40-week moving average line is positive and the direction of the weekly OBV line is too.
The MACD oscillator is bullish but the two moving averages that make up this indicator narrowed in recent weeks.
In this daily Point and Figure chart of CVS, below, we can see a potential upside price target of $91 but also that a trade at $76.72 is needed to refresh the uptrend. We may see that strength today.
In this weekly Point and Figure chart of CVS, below, we can see a longer-term price target of $108 being projected.
Bottom line strategy: Continue to hold longs from our previous recommendation. Raise stop protection to $71 from below $67. $91 and then $108 are our new price targets.