CVS Health Corporation (CVS) Stock Moves Down and Here’s Why

CVS Health Corporation (NYSE: CVS) shares fell on Thursday February 2 on lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, The Dow Jones Industrial Average DJIA, -0.10% fell 34 points, or 0.2%, to 19,858. The S&P 500 SPX, -0.11% lost 4 points to 2,276, a drop of 0.2%. The Nasdaq Composite Index COMP, -0.05% slid 16 points, or 0.3%, to 5,626. Among the most actively traded Nasdaq stocks was Facebook Inc FB, +0.31% which fell 0.7% a day after it reported its quarterly results.

Shares of CVS Health Corporation (NYSE: CVS) were downgraded by analysts at Robert W. Baird in a note to their investors today. The company currently has a rating of Neutral on the stock. The one-year price target of $87.95 is higher than the opening price of $76.35, resulting a fair amount of other analysts to comment on the stock in recent days. Looking back over the last year, CVS Health Corporation stock has a high of $106.67. Downgrades happen when analysts believe that the future prospects for the security have diminished from the original recommendation, usually caused by a material and major change in the company’s operations, future vision or industry.

Yesterday CVS Health Corporation (NYSE: CVS) shares last traded at $74.84, which represents a drop of $3.13 from the previous closing price. Opening at $76.35, they fluctuated from $74.67 and $76.35 throughout the day.

CVS Health Corporation (NYSE: CVS) now has a market cap of 79.81B.

CVS Health Corporation (NYSE: CVS) Average Daily Trading Volume

3,662,902 shares crossed the trading desk yesterday, 85 percent below the average, out of a total float 1,064,850,000. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% higher than normal on the breakout to show that fund managers and other professional investors are jumping in.

Institutional sponsorship just refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Professional investors such as these have substantial teams of analysts that research thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

CVS Health Corporation (NYSE: CVS) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of successful trades.

Trades for CVS Health Corporation (NYSE: CVS) have ranged from $69.30 – 106.6700, and the stock now has a 50-day MA of $80.40 and 200-day MA of $86.07. Today’s last price is 29.84%% below the 52 week high of $106.67.

Earnings growth is an important factor to consider when buying stocks and investors watch for companies that have grown their earnings at least 25% or more over 3 consecutive years.

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