In his Real Money column "An Analyst's Dream", Jim Cramer said when a company raises its forecasts and its shares slump, that's an opportunity worth pouncing on. Case in point, UnitedHealth Group Inc. (UNH) , which reported a terrific quarter Wednesday, only to see its shares fall by $4. On Thursday, however, the stock received multiple upgrades and that slump was quickly reversed.
We looked at UNH earlier this week ahead of earnings and wrote that, "UNH is trading like investors are anticipating a positive earnings report. I would join in on the long side risking a close below $285. The $344 area is our price objective after the breakout."
Let's check and see if the charts still look positive this morning.
In the updated daily bar chart of UNH, below, we can see that the shares remain very close to the 52-week high. Prices are above the rising 50-day and 200-day moving average lines.
The On-Balance-Volume (OBV) line remains strong and pointed up. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line but looks like it is cautiously moving up again.
In this weekly bar chart of UNH, below, we don't have any meaningful change from our last look -- all still positive.
In the daily Point and Figure chart of UNH, below, we can see that a trade at $315.17 will be a new high for the move up and a breakout. The price target is still $344.
Bottom-line strategy: Continue to hold longs and aggressive traders could add to positions above $315.17.