NEW YORK (TheStreet) -- CVS Health (CVS) was called CVS Caremark until Sept. 3, when the company changed its name and stopped selling tobacco products a month ahead of schedule. Investors have been rewarded as the stock has rallied 7.6% with the S&P 500 (SPY) up just 0.8% over the same time horizon.
CVS continues to have technical momentum and should continue to the upside given a positive reaction to earnings. The company will report its third-quarter results before the opening bell on Tuesday, and analysts expect the company to earn $1.13 per share.
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Investors will be focusing on the status of the drugstore chain partnership with health care insurer Humana (HUM) . Last month CVS agreed to allow some CVS Pharmacy locations to be used by Humana to educate individuals about their health care options under the Affordable Care Act. Success of the Minute Clinics will be an important piece of guidance to watch.
The stock has been above its 200-day simple moving average since November 2012. Given this solid uptrend, investors should buy weakness using a "good 'til canceled" limit order to buy weakness to the 50-day simple moving average at $81.26.
Archrival Walgreen (WAG) ($64.22) has been a clear underperformer. This stock broke below its 200-day simple moving average on Aug. 6 and is currently trading between its 50-day SMA at $61.57 and its 200-day SMA at $65.99. While CVS trades to new highs, Walgreen is 16% below its all-time intraday high set at $76.39 on June 19. Walgreen's set its latest quarterly result on Sept. 30 for its quarter ending in August, and shares have traded sideways-to-up since then.
Let's look at the daily chart for CVS Health.
Courtesy of MetaStock Xenith
Looking from the lower left to the upper right, CVS Health ($85.81) has been above its 200-day simple moving average (green line) since Nov. 28, 2012, when this average was $45.61. The 200-day SMA was tested at $56.30 on Oct. 4, 2013, and then the stock's momentum run continued to the upside.