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Today, we’re opening a new bearish trade on CVS Health Corp (NYSE:CVS).
Yesterday’s earnings report from CVS was a disaster for the company, and the stock dropped immediately. We feel that the full downside move isn’t done yet and that the stock will continue to attract sellers as investors price in the potential impact of Amazon.com, Inc. (NASDAQ:AMZN)’s move into its industry.
The stock broke support and a bearish “pennant” pattern on what was otherwise a reasonably positive day in the market. Assuming traders revert back to the market’s mean in the near term, this stock should decline significantly.
‘Buy to open’ the CVS December 65 Puts (CVS171215P00065000) for a maximum price of $2.05.
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