Quest Diagnostics Incorporated (DGX) shares moved briefly higher during Tuesday's session after Morgan Stanley upgraded the stock to Overweight with a price target of $139 per share. The new price target reflects a nearly 20% premium to Monday's closing price.

Analyst Ricky Goldwasser believes that the COVID-19 diagnostic testing opportunity may be larger than expected if it is added as part of a pre-elective procedure routine. With broadening testing guidelines and new market opportunities, Goldwasser raised her 2021 estimates above her pre-COVID-19 forecasts and sees opportunities for Quest Diagnostics to gain market share.

In addition, Quest Diagnostics announced that individuals could purchase COVID-19 antibody testing kits for themselves through QuestDirect without visiting a doctor's office. The new service significantly broadens access to COVID-19 antibody tests. After visiting a Quest center to get blood drawn, the results are available within one or two days following the bloodwork.

Chart showing the share price performance of Quest Diagnostics Incorporated (DGX)
TrendSpider

From a technical standpoint, the stock briefly broke out from its pre-crisis highs made in early March before giving up ground later in the session. The relative strength index (RSI) remains in overbought territory with a reading of 73.70, but the moving average convergence divergence (MACD) remains in a strong bullish uptrend. These indicators suggest that the stock could see some consolidation before a move higher.

Traders should watch for a close above reaction highs of around $118.70 over the coming sessions to confirm a breakout and a subsequent move to fresh highs. If the stock moves lower, traders could see the stock price reach trendline support near $110.00 over the next few days. Technical indicators suggest that the stock could see some consolidation before another move higher, but the intermediate-term trend remains decidedly bullish.

The author holds no position in the stock(s) mentioned except through passively managed index funds.