Healthcare reform has stalled, making it necessary to fund existing channels of subsidies targeted to main street USA, particularly in rural America, where many of the 9,700 CVS Health  (CVS) pharmacies are located. This potential could help a bottoming process for the stock, and is the reason to buy CVS Health now.

The U.S. Department of Health and Human Services, headed by Secretary Tom Price, can seek additional funding for the National Health Services Corp and the Health Resources & Services Administration.

These organizations provide funding for healthcare job creation and healthcare programs in rural America. There are health centers around the country that provide high-quality preventive and primary healthcare, including patients with no insurance.

CVS Health could be awarded subsidies to expand its walk-in minute clinics as only 1,100 CVS stores have these services. Each clinic has a registered nurse practitioner who can write prescriptions, and top-notch pharmacists who can help determine treatment options. This would avoid expensive trips to hospital emergency rooms.

A major source of healthcare funding can come from the $4.5 trillion Federal Reserve balance sheet. The Federal Reserve should be mandated to allow proceeds from maturing issues and interest payments be used by the U.S. Treasury to fund healthcare reform, including Medicare and Medicaid.

CVS Health reports earnings before the opening bell Tuesday and analysts expect the pharmacy giant to earn $1.31 a share. Some analysts expect the drug store chain to beat estimates, but others worry about Amazon  (AMZN) expanding into the pharmacy services.

The Weekly Chart for CVS Health

Courtesy of MetaStock Xenith

The weekly chart for CVS Health ($77.97 on Aug. 4) is neutral with the stock just below its five-week modified moving average (in red) at $78.45. The stock has been below its 200-week simple moving average (in green) since the week of Nov. 11, with this average now $87.56. A positive reaction to earnings should begin a trend toward this "reversion to the mean." The 12x3x3 weekly slow stochastic reading ended last week at 38.16 up slightly from 37.44 on July 28. 

The chart shows a downtrend going back to the July 2015 all-time intraday high of $113.65. The horizontal line is the post-election low of $69.30 set on Nov. 8.

Investment strategy: Start a long position at my annual value level of $77.90. Add to longs on weakness to my quarterly value level of $73.13. Reduce holdings on strength to my monthly risky level of $82.31. My annual risky level is $100.06.

More of What's Trending on TheStreet:

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

More from Stocks

Cramer: Amazon Will Be an 'Outsized Winner' When Consumer Trends Shift Online

Cramer: Amazon Will Be an 'Outsized Winner' When Consumer Trends Shift Online

EBay Stock Tumbles 8.9% to Hit Lowest Level in Nearly 2 Years

EBay Stock Tumbles 8.9% to Hit Lowest Level in Nearly 2 Years

Disney Is One of Jim Cramer's 10 Best Stocks for a Market Pullback

Disney Is One of Jim Cramer's 10 Best Stocks for a Market Pullback

Your Need to Know - Forward Look

Your Need to Know - Forward Look

How E-Mini S&P 500 Revolutionized Equity, Electronic Trading

How E-Mini S&P 500 Revolutionized Equity, Electronic Trading