Shares of UnitedHealth Group (UNH) jumped Friday morning on the company's second-quarter earnings beat, as earnings season gets off to a flying start.
UNH stock price is up more than 7% so far Friday but that does not mean it is "out of the woods."
Let's check the status of the charts and indicators.
In the daily bar chart of UNH, below, I can see Friday's surge in price but it has not reversed the downtrend in place since early November. Prices have rallied to the underside of the declining 50-day moving average line and are still below the declining 200-day moving average line.
Trading volume has picked up the past six weeks as traders have voted with their feet. The On-Balance-Volume (OBV) line has been in a decline and the 12-day price momentum study does not show me a bullish divergence ahead of Friday's rally.
In the weekly Japanese candlestick chart of UNH, below, I see a large rounded top pattern. The shares have rolled over for several months and trade below the declining 40-week moving average line.
The weekly OBV line has been declining for a while now. The 12-week price momentum study has made a higher low from March to June but this bullish divergence may not be enough to move the needle.
In this daily Point and Figure chart of UNH, below, I can still see a downside price target in the $446 area.
In this weekly Point and Figure chart of UNH, below, I can see a downside price target in the $385 area.
Bottom-line strategy: Has UNH made a low? Probably. Is UNH a buy here? I am not so sure. I need to see more evidence. Stay tuned.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
