Looking over our charts and indicators today I think UnitedHealth Group (UNH) could have a shallow correction within a longer-term uptrend. A pullback could be just a tweet away but let's check the charts and indicators.
In this one-year daily chart of UNH, below, we can see three parts to the price action in the past year. Part one was the rally from February to the end of July. Part two was the sideways correction from August to November. Part three is still in progress and is the post-election rally since early November. Price-wise, UNH is above the rising 50-day moving average line, which intersects below $155 and above the rising 200-day moving average line. Beneath the surface, the On-Balance-Volume (OBV) line and the momentum study suggest a less robust picture. The OBV line has been in a sideways trend the past four months. Prices have turned higher but a pattern of aggressive buying or accumulation is not visible.
Now turn your eyes to the momentum study in the lower panel, above. Notice the bearish divergence between the higher price highs and lower momentum readings? The rate of acceleration in price has slowed. This is not an immediate sell signal but a sign that gains are harder and harder to achieve as longs are probably using the price strength to take profits.
This three-year weekly chart of UNH, below, has positives and negatives. Prices are above the rising 40-week moving average line but the weekly OBV line has not made a new high along with the price action and the MACD oscillator has started to narrow towards a possible take profits sell signal.
Bottom line: UNH is still in an uptrend but momentum has slowed and buyers appear less aggressive. Longs should be on alert for a shallow pullback. A dip to $155 or so may turn out to be another buying opportunity if buyers get more aggressive.