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Possible Rebound for CVS Health Stock on the Horizon

Yesterday, health insurance stocks experienced a decline due to lower than expected final Medicare Advantage (MA) payment rates. This news also had an impact on CVS Health Corp (NYSE:CVS) stock, which saw 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, a trendline that has historically been bullish.

Before 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. However, Schaeffer’s Senior Quantitative Analyst Rocky White notes that CVS has been within one standard deviation of its 200-day moving average before, which resulted in a 3% gain on average one month later. Additionally, the stock’s 14-day relative strength index (RSI) of 29.4 suggests that it is oversold and could see a short-term bounce. It is worth considering buying the dip for those who are looking for opportunities in this market.

By Samantha Jones

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