CVS shares gain the most in 16 months on Thursday, company moves closer to acquiring Aetna

December 1, 2017 11:06 am

According to a source with knowledge of the situation, CVS Health Corp (CVS) is approaching a deal to acquire Aetna Inc for more than $66 billion. The cash and stock deal could be announced during the upcoming week.

CVS shares closed higher for a third consecutive trading session on Thursday. It has also been the sharpest daily surge since August 2nd 2016. The stock went up 4.36% ($3.20) to $76.60, after touching an intraday high at $77.75, or a price level not seen since October 6th ($80.47).

In the week ended on November 26th the shares of the pharmacy benefits manager lost 0.18% of their market value compared to a week ago, which marked a second consecutive period of decrease.

The stock appreciated 11.78% in November, which marked the best monthly performance since December 2010.

For the entire past year, the shares of the NYSE-listed company plummeted 19.29%. The stock has retreated another 2.93% so far in 2017.

A potential agreement would combine one of the leading pharmacy benefits managers in the United States, CVS, with Aetna, a health insurer offering products which range from employer health care to government plans nationwide.

Being pressured by the government and corporations to cut medical costs, pharmacy benefits managers and insurers often take action by consolidating health care products and services.

According to a report by the Wall Street Journal, negotiations between the two companies have already reached an advanced stage. The deal may be mostly cash-based and may value Aetna Inc at $200 to $205 per share.

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding CVS Health Corp’s stock price, have a median target of $85.00, with a high estimate of $109.00 and a low estimate of $73.00. The median estimate is a 10.97% surge compared to the closing price of $76.60 on November 30th.

The same media also reported that 14 out of 24 surveyed investment analysts had rated CVS Health Corp’s stock as “Buy”, while 9 – as “Hold”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the CVS stock are presented as follows:

R1 – $76.99
R2 – $77.37
R3 (Range Resistance – Sell) – $77.76
R4 (Long Breakout) – $78.91
R5 (Breakout Target 1) – $80.26
R6 (Breakout Target 2) – $80.97

S1 – $76.22
S2 – $75.83
S3 (Range Support – Buy) – $75.45
S4 (Short Breakout) – $74.29
S5 (Breakout Target 1) – $72.94
S6 (Breakout Target 2) – $72.23

By using the traditional method of calculation, the weekly levels of importance for CVS Health Corp (CVS) are presented as follows:

Central Pivot Point – $70.80
R1 – $71.82
R2 – $73.10
R3 – $74.12
R4 – $75.15

S1 – $69.52
S2 – $68.50
S3 – $67.22
S4 – $65.95

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