Shares of CVS Health (CVS) bounced in recent sessions on its Q4 earnings numbers and the announcement of its purchase of Oak Street Health (OSH) , but the charts have not changed their longer-term trend.
Let's check the charts.
In this daily bar chart of CVS, below, I can see that prices made small lows in late January and early February. Prices have popped to the upside but the indicators are not supportive. Prices trade below the declining 50-day moving average line and below the declining 200-day line.
The trading volume has been heavy in recent weeks but the On-Balance-Volume (OBV) line has only made a limited and recent bounce. The Moving Average Convergence Divergence (MACD) oscillator has generated a cover shorts buy signal but remains well below the zero line and an outright buy signal.
In this weekly Japanese candlestick chart of CVS, below, prices almost made a bullish engulfing pattern the past two weeks. Almost is not the same as saying that CVS did make a bottom reversal.
Prices are below the declining 40-week moving average line. The weekly OBV line remains weak and the MACD oscillator is still below the zero line.
In this daily Point and Figure chart of CVS, below, I can see a potential upside price target of $100.
In this weekly Point and Figure chart of CVS, below, I can see a bearish price target in the $65 area.
Bottom line strategy: CVS has been in a weak trend for more than a year and the charts suggest that trend is likely to continue. Avoid the long side of CVS for now.
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