Walgreens Boots Alliance, Inc. (WBA) is the largest drugstore chain in the U.S., operating both pharmacy and wellbeing services under the names Walgreens, Duane Reade and Boots Alliance Healthcare.

Some plans on infrastructure spending include fighting the opioid epidemic while improving rural healthcare, home healthcare services and high-speed broadband internet in a rural expansion. A good public-private alliance could be formed with Walgreens, as the company has stores in many rural towns across the country.

Walgreens stock closed Tuesday at $74.95, down 9.4% since the end of 2016 but up 17.4% since setting its 52-week low of $63.82 on Oct. 27. The stock set its 52-week intraday high of $88.00 on Feb. 21, 2017, and is in correction territory since then, down 14.8%. 

Walgreens reports earnings before the opening bell on Thursday, Jan. 4, and analysts expect the company to post earnings per share between $1.27 and $1.30. The pharmacy is expected to benefit from new prescription pharmacy partnerships, including those recommended by Medicare and Medicaid. Shares of Walgreens were hurt by the notion that Amazon.com, Inc. (AMZN) would expand into prescription drugs, but that plan seems to be hold. (See also: Walgreens CEO: Amazon Not Yet a Major Rival.)

The daily chart for Walgreens

Daily technical chart showing the performance of Walgreens Boots Alliance, Inc. (WBA) stockCourtesy of MetaStock Xenith

Walgreens stock has been below a "death cross" since June 22, when it closed at $76.37. A "death cross" occurs when the 50-day simple moving average falls below the 200-day simple moving average and indicates that lower prices lie ahead. The 200-day simple moving average was at a sell on strength level between Sept. 12 and Sept. 19, when this average was $82.54. The "death cross" was in play when the stock traded as low as $63.82 on Oct. 27.

The weekly chart for Walgreens

Weekly technical chart showing the performance of Walgreens Boots Alliance, Inc. (WBA) stockCourtesy of MetaStock Xenith

The weekly chart for Walgreens has been positive since the week of Dec. 1, with the stock now above its five-week modified moving average of $72.47. The stock is below its 200-week simple moving average at $78.77, which is also the "reversion to the mean," last tested during the week of Sept. 29, when the average was $78.07. The 12 x 3 x 3 weekly slow stochastic reading ended 2017 rising to 49.63, up from 40.58 on Dec. 22.    

Given these charts and analysis, I recommend buying Walgreens on weakness to my monthly value level of $65.24 and reducing holdings on strength to my annual and semiannual risky levels of $86.80 and $100.23, respectively. My quarterly pivot is $73.67. (For additional reading, see: Amazon, CVS to Nab Walgreen’s Rx Business: Leerink.)

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