During last Friday's "Mad Money" program Jim Cramer told viewers about the stocks reporting on Wednesday that he is watching closely. Cramer was bullish on UnitedHealth Group (UNH) , Procter & Gamble (PG) and Morgan Stanley (MS) .
Let's check out UNH first. We last reviewed UnitedHealth on Nov. 5 and wrote at that time, "I feel more confident about buying the new highs of UNH -- this could be what the doctor ordered."
In this daily bar chart of UNH, below, we can see that the share price of UNH has traded sideways since early November. Dips to the rising 50-day moving average line have been bought. The slope of the 200-day moving average is positive. The On-Balance-Volume (OBV) line has been pointing lower since November and suggests that sellers of UNH have been more aggressive, with heavier volume traded on days when UNH has closed lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator has also weakened since November and is now not far above the zero line.
In this weekly bar chart of UNH, below, we see a mixed picture. Prices are still in a longer-term uptrend above the rising 40-week moving average line. Prices have traded sideways in the past several weeks when the broad market averages have continued to rise. The OBV line is rising and looks stronger than the daily OBV line. The MACD oscillator shows a weakening pattern from May.
In this daily Point and Figure chart of UNH, below, we can see a mixed picture. The software shows a potential upside price target of $401, but a trade at $369.56 is needed to refresh the uptrend. The volume-by-price bars on the left scale show a good amount of volume in the $338-$360 area. A price decline to the lower end of this band could precipitate further weakness.
Bottom line strategy: I have no special knowledge of UNH's earnings due for release Wednesday morning, but the indicators are not giving us a strong feel at this juncture. I would stand aside through the report.
