Intense sell-off sees the stock back at Covid levels

CVS Health Corp is now down 28% YTD after reporting weak earnings, the company missed analysts' expectations and revised its guidance for the upcoming quarters. This has been taken negatively by investors and as a result, saw a huge sell-off. Yesterday’s session saw the stock close at $56.30 a share. Based on the weekly chart, the price has now approached the support channel drawn on the chart. This channel is a key support area for the stock to maintain itself, this area of $52-$56 is the low of the Covid pandemic. A break below this area would create some concerns for investors as short-selling would increase, potentially drive the share price lower to levels not seen since 2014. If the stock manages to stabilise around this area it may find a footing once more as the even though the healthcare sector has seen a dump this quarter, data from institutions demonstrate that buying in this sector is now on the rise as fear among other sectors is rising. The MACD has now turned negative and so has the RSI as it reads 28. The RSI has now actually entered the oversold territory, meaning a small grind lower is possible before a bounce higher for some stability. Though this is not guaranteed.