Shares of CVS Health (CVS) erupted higher on Thursday. Near the open, shares were up more than 8% on the day, but have since tempered the gain to "just" 4% heading into the final few hours of trading.

It's not earnings or M&A driving the gains. Instead, CVS Health stock is jumping higher thanks to a decision from the White House.

The administration will reverse the proposed overhaul of rebates collected by middlemen. This is helping pharmacy benefit managers and healthcare stocks -- and it's not just CVS stock rallying on the news.

Cigna (CI) is up 9.5%, Humana (HUM) is up 3.7% and Centene (CNC) climbed 3.5%. However, Walgreens (WBA) is flat on the day.

On the flip side, drugmakers are under pressure, with Bristol-Myers Squibb  (BMY) , Gilead Sciences (GILD) , Biogen (BIIB) , Regeneron (REGN) and others all under pressure.

For CVS Health, though, the rally sparked a potentially large move in the name. In many investors' eyes, the stock has been unfairly punished, falling throughout most of 2019 while the markets have been rallying. Even after Thursday's rally, shares are still down 12% for the year, compared to the near-20% gain in the S&P 500.

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Trading CVS Health Stock

Daily chart of CVS Health stock.
Daily chart of CVS Health stock.

CVS Health stock opened near $60 per share on Thursday, its highest level since February. However, the stock has been in decline throughout the session, erasing roughly half of its gains.

Investors now need to see the $57 to $57.50 area hold as support. Just as we talked about Delta Air Lines (DAL) on its post-earnings rally, it's quite constructive to see former resistance turn to support.

In this case, it would be very constructive, given how poorly CVS Health stock has done over the past few months. Below this key area could send shares back down the last area of support, which is a confluence of the 20-day and 50-day moving averages. These moving averages have been guiding CVS stock higher over the past few weeks.

Should the $57 to $57.50 area hold as support, Thursday's high would be the first target, while $62 would be the upside target.

The latter of the two marks a significant level over the past 12 months, while the declining 200-day moving average is up near $62.75 and the 38.2% retracement for the one-year range is at $62.54.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.