Current Developments on CVS chart can make for opportunityHi guys! This is a Technical analysis on CVS Health Corporation (CVS) on the 3 day timeframe.
We discuss some Current developments on CVS, which maybe pointing to signs of potential opportunity to invest/ hold CVS.
We've had a deathcross that has brought us down more than 38%.
Which has lead us to a critical support trendline that has acted as support since March 2019.
We recently bounced from this trendline with a BULLISH ENGULFING candle print
We have from this support line bounced up to reach the 21 EMA
Current price action is attempting to establish support on 21 EMA.
MACD has crossed Bullish with Green bars printing.
BUT also remember that we have resistance above us from the 50 SMA.
We are also in an established DOWNTREND from the Deathcross. Until proven otherwise so we have to pay attention for signs of trend change.
Key area is around the 2 moving averages. We need to establish support on 21 EMA. We have to also see how we react with the 50 SMA. If we get ABOVE 50 SMA and maintain support, it is likely we print a GOLDEN CROSS, leading to BUY pressure to come in.
This could be the necessary catalyst for trend change.
Another hint in an attempt to trend change is the 21 EMA flattening out, beginning to show signs of a curvature to upside.
Now lets Look left to find evidence of previous patterns in the Moving average interactions, Support line interaction and MACD.
Our first time interacting with the SUpport line, we had many touches, before printing a GOLDEN CROSS. ALong with MACD CROSS ABOVE 0 level, we had a 48% Uptrend.
Our 2nd interaction with SUpport line, we experienced a fakeout on the 1st touch. MACD could NOT move ABOVE 0 level.
The 2nd touch of support line, had the GOLDEN CROSS and the MACD cross ABOVE 0 level. This lead to an extended Bull run for CVS with gains of 100%.
Keep this in mind. Look for similar pattern in our current price action. If we see a Golden Cross with MACD crossing ABOVE 0 level. This would mean an UPTREND is probable. But dont discount the possibility of a fakeout. We can always have another attempt to test support on support line.
Watch closely for these to develop in our current price action. Best opportunity to invest would be after Golden cross has been established with confirmed MACD cross Above 0 level in my opinion.
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DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
