UnitedHealth Stock Looks Bullish, but Resistance Looms Nearby

UnitedHealth stock is rallying after better-than-expected earnings, but resistance looms overhead.


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UnitedHealth Group  (UNH) – Get Free Report has been a strong stock over the past year and is in focus again on Friday.

Shares initially opened lower on the day, but are now up more than 2.25% after the company reported better-than-expected fourth-quarter earnings.

The company posted double-digit revenue and earnings growth as UnitedHealth delivered a top- and bottom-line beat.

The stock has performed quite well over the past year, up more than 7% vs. the S&P 500’s 16% decline in the same span.

In the fourth quarter, UnitedHealth stock hit a multi-month low as the stock market hit a 2022 low. However, the ensuing rebound sent the stock to new all-time highs on Oct. 31.

That said, UnitedHealth has been prone to some sharp declines in the 7% to 10% range over the last few months. Shares endured just such a decline to start off the year.

Trading UnitedHealth Stock on Earnings

Daily chart of UnitedHealth stock. Chart courtesy of TrendSpider.com

© Provided by TheStreet
Daily chart of UnitedHealth stock. Chart courtesy of TrendSpider.com

That aforementioned pullback sent UnitedHealth stock to its 21-month moving average for the first time since 2020. With Friday’s rally, shares are reclaiming $500 and the 10-day moving average.

This is a great start for the bulls, as the stock is holding key measures on the higher timeframes. That said, it has a wall of resistance between $515 and $525.

While that’s admittedly a wide range, it’s where UnitedHealth stock faces the 50% retracement of the current range, the daily VWAP measure, and the 21-day, 50-day and 200-day moving averages.

If UnitedHealth Group can maintain momentum from here, this zone is obtainable and traders may consider taking some profits near $520.

If it can clear all of these measures though, it opens the door up toward $540 and then resistance in the mid-$550s.

On the downside, bulls would love to see $500 hold as support. If it fails, the recent lows near $485 are back in play, along with the 21-month moving average.

UnitedHealth stock has been outperforming over the last 12 months, but has been struggling so far this year. Shares are down about 5% so far in 2023, including Friday’s rally, while the S&P 500 is up about 4%. 

So keep that in mind when evaluating this stock. 

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