• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

CVS Stock Needs to Refill Its Prescription

Charts are looking 'toppy' right now.
By BRUCE KAMICH
Mar 29, 2022 | 12:01 PM EDT
Stocks quotes in this article: CVS

CVS Health  (CVS) was downgraded to "hold" from "buy" by sell-side financial institution Deutsche Bank on Tuesday. Let's check out the charts and indicators to see what's happening with the stock.

In our last review of CVS on Feb. 8 we wrote that "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."

Let's look again.

In the daily bar chart of CVS, below, we can see that prices made a high in early February and pulled back to hit our sell stop at $102 before a minor recovery rally into the middle of March. Prices have stopped short of breaking the February highs and have begun to weaken.

The trading volume did not expand in March, which told us that traders were not enthusiastic about the rally. The On-Balance-Volume (OBV) line shows weakness from early February. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has narrowed and could soon cross to the downside for a take profit sell signal. 

 
 
In the weekly Japanese candlestick chart of CVS, below, we can see some upper shadows around $110 telling us that some traders are rejecting the highs. The slope of the 40-week moving average line is positive.
 
Trading volume declined on the second peak around $110. The weekly OBV line shows a rise the past two months but the line did not make a new high that might foreshadow a new price high. The trend-following MACD oscillator has been weakening the past two months telling us that the strength of the uptrend is weakening. 
 
 
 
In this daily Point and Figure chart of CVS, below, we can see a potential downside price target in the $87 area. 
 
 
In this weekly Point and Figure chart of CVS, below, we see a potential upside price target of $152 but a trade at $98 will start to weaken this picture. 
 
 
 
Bottom-line strategy: Traders should avoid the long side of CVS as the charts have weakened and a fundamental downgrade won't help.
 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Health Care Equipment & Services | Healthcare | Analyst Actions

More from Stocks

Stay Guarded Amid Rally's Rotation

James "Rev Shark" DePorre
May 23, 2022 4:41 PM EDT

Stocks spin, and that makes the market picture rather murky.

Dare I Recommend a Retail Name Like American Eagle Outfitters?

Bruce Kamich
May 23, 2022 3:15 PM EDT

Let's check out the charts.

Gravity Is Pulling on Apple

Mark Sebastian
May 23, 2022 2:32 PM EDT

Here's where I see AAPL going and how to play it.

Look for General Motors Shares to Restart Their Uptrend

Bruce Kamich
May 23, 2022 2:10 PM EDT

Why aggressive traders could get behind the GM wheel again.

Alibaba Is Sold out on the Downside

Bruce Kamich
May 23, 2022 1:26 PM EDT

China at a bearish extreme is an opportunity.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login