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  1. Home
  2. / Investing
  3. / Stocks

UnitedHealth Takes Shareholders on a Wild Roller Coaster Ride

Now may not be the time to enter the healthcare giant's stock based on the bigger picture painted by its charts.
By BRUCE KAMICH
Apr 21, 2023 | 07:50 AM EDT
Stocks quotes in this article: UNH

UnitedHealth Group ( UNH) has moved sharply lower, then sharply higher, then back down again in the space of a few weeks' time. A wild ride to say the least. I will leave the fundamental news background to others and try to figure out the next steps we might see on the charts of the diversified healthcare giant.  
 
In this daily bar chart of UNH, below, I see a picture that only the nimblest of traders could negotiate. Prices rolled over and declined from November to March and broke a major long-term uptrend. But the bulls were not done and prices rallied about $70 in the time leading up to UnitedHealth's quarterly numbers. UNH now has felt the power of gravity again in recent days. UNH failed around the 200-day moving average line and is retesting the rising 50-day moving average line. Trading volume has been slowly rising the past six weeks. The On-Balance-Volume (OBV) line shows me a choppy rise from early February. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal (a sell in an uptrend). 
 
 
In this weekly Japanese candlestick chart of UNH, below, I see a large gravestone doji earlier this month. The rally and the large upper shadow are right at the intersection of the 40-week moving average line. The weekly OBV line shows weakness. The MACD oscillator is bearish with an attempt at a cover shorts buy signal. 
 
 
 
In this daily Point and Figure chart of UNH, below, we ignore volume and time. The pure price action still suggests a bullish price target in the $660 area. A trade at $464.60 should weaken the picture. 
 
 
 
In this weekly Point and Figure chart of UNH, below, I see the same $660 price target as the daily chart above. 
 
 
 
Bottom line strategy: Keep your powder dry is the old saying on the trading floor. The bigger picture is a problem in my mind. Stand aside.
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TAGS: Investing | Stocks | Technical Analysis | Health Care Equipment & Services | Healthcare | Real Money

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