UnitedHealth Group (UNH) could weaken further in the context of an ongoing uptrend. Even though UNH is higher on a day when the Dow Jones Industrial Average is down more than 300 points, it doesn't mean the UNH and the other members of the DJIA can't soften further.
Every stock is a little different so let's examine the charts and indicators of UNH to see if it is healthy or needs to see the primary care doctor.
In this daily bar chart of, below, we have a couple of technical clues to suggest that UNH can weaken further. UNH closed below the rising 50-day moving average line on Tuesday but may close back above it today. Then stock is above the rising 200-day moving average line but crossing that average line will be a late signal if and when it occurs.
What is more interesting is the bearish divergence from the daily On-Balance-Volume (OBV) indicator, which made a lower high in April/May than the high seen in March. This is in contrast to the higher price high in late April/early May. The OBV line showed a weaker pattern versus price and suggests that traders sold the rally to $175.
The Moving Average Convergence Divergence (MACD) oscillator also diverges from the higher highs with just equal highs in the same period. These clues are subtle but could mean that UNH tests support in the $165-$160 area.
In this weekly chart of UNH, below, we also see some subtle softness. Yes, prices are still above the rising 40-week moving average line but the weekly OBV line has been weakening the past five months, suggesting selling into strength. The weekly MACD oscillator has also been weakening the past four months.
In this Point and Figure chart of UNH, below, we get another perspective on the price action. Here support starts at $163.43 and extends down to $157.05. This chart also has a longer-term upside price target of $187.
Bottom line: We don't have signs of a major top developing so I only anticipate some limited softness in the price of UNH. Nevertheless, traders might want to raise their sell stops just in case.