CVS Health Corp (CVS) is set to report their latest earnings numbers before the opening of trading Wednesday. Let's check out the charts and indicators. WE were bullish in our last review of almost a year ago. On February 16 we wrote "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."
In this daily bar chart of CVS, below, we can see that prices recently reached our year-ago price target of $108. CVS has been in an uptrend the past 12 months and trades above the rising 50-day average and the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has been in a new rising trend since early October and tells me that traders are more aggressive buyers of CVS.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of CVS, below, we can see that prices have doubled over the past two years. Prices are trading above the rising 40-week moving average line. The two most recent candles are a doji and a spinning top - two potential top reversal patterns but both lack confirmation.
The weekly OBV line has been positive the past three years and confirms the price gains. The MACD oscillator is bullish.
In this daily Point and Figure chart of CVS, below, we can see a potential upside price target of $140.
In this second Point and Figure chart of CVS, below, we used weekly price data. Here the software points to a $152 price target.
Bottom line strategy: I have no special knowledge of what CVS may report but the charts are pointed higher. Strong looking charts ahead of earnings in a bull market are one thing and in a bear market it is another thing.
With our $108 price target reached, traders should nail down some profits ahead of the numbers Wednesday morning. Raise stops on any remaining long positions to $102. If prices continue to advance it is great but those two candlestick patterns (noted above) are one reason to play it cautious for now.
