On 2/12/20, CVS reported earnings that broadly beat the street’s estimates. CVS reported adjusted EPS of $1.73, which beat estimates of $1.68. The company reported revenue of $66.9B, which also beat estimates of $63.97B. The company forecasted annual EPS from $7.04 – $7.17 in 2020, which was in-line with analyst expectations of $7.15. Let’s see what the charts tell us.

CVS (CVS) Weekly Chart Grid – annotations by askSlim.com

At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.

 

askSlim.com Technical Briefing: The weekly cycle analysis suggests that CVS formed an important cyclical base and is in a very positive intermediate-term pattern. Weekly momentum is negative.

On the upside, there is an intermediate-term Fibonacci confluence zone from 79.19 – 82.71. On the downside, there is an intermediate-term support zone from 70.58 – 68.58. For the bears to regain control of the intermediate-term, we would likely need to see a weekly close below cycle low support at 66.79.

 

askSlim.com Sum of the Evidence: CVS is in a very bullish intermediate-term cycle pattern with negative momentum. Given these conditions, we would expect short-term sell-offs to be limited to the intermediate Fibonacci support zone beginning at 70.58. There is a likelihood the stock tests 79 by May.

 

 

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