CVS Health Experiences Bullish Turnaround After Three-Year Bear Market

What's Happening?

CVS Health has shown a significant bullish turnaround following a three-year bear market cycle. This shift began in March when the monthly MACD confirmed its first 'buy' signal since September 2019. The stock broke out above resistance from the weekly cloud model in June, indicating a reversal of the cyclical downtrend. CVS is now positioned above a 38.2% Fibonacci retracement level resistance near $69, suggesting potential for further positive momentum. The stock's performance relative to the S&P 500 Index also appears to be improving, marking a departure from its previous underperformance in 2023 and 2024.

Why It's Important?

The bullish turnaround for CVS Health is significant for investors and the broader market. As CVS moves out of its trading range, it could achieve the 61.8% Fibonacci retracement level near $85 in the coming months. This development may attract more investors, boosting confidence in the stock and potentially leading to increased market activity. The improvement in CVS's performance relative to the S&P 500 Index suggests a shift in investor sentiment, which could influence investment strategies and market dynamics.

What's Next?

If CVS continues to close above the 38.2% Fibonacci retracement level for two consecutive weeks, it could confirm a breakout and accelerate positive short-term momentum. Investors and analysts will likely monitor these developments closely, as they could signal further gains and influence broader market trends. The defined support by the 200-day moving average near $61 provides a safety net for investors, potentially stabilizing the stock's performance.