A Real Money subscriber pointed out to us that the Health Care Select Sector SPDR ETF (XLV) held up well in recent weeks as the broad market averages suffered. The largest hold in the XLV appears to be UnitedHealth Group (UNH) , so let's check out the charts.
In this daily bar chart of UNH, below, we can see that prices have continued higher after a September correction. UNH is trading above the rising 50-day moving average line and the rising 200-day line.
The On-Balance-Volume (OBV) line has moved sideways since early August but is starting to show fresh improvement this month.
The Moving Average Convergence Divergence (MACD) oscillator has narrowed and could soon cross to the upside for a fresh outright buy signal.
In this weekly Japanese candlestick chart of UNH, below, we see a positive picture. Prices are in a longer-term uptrend above the rising 40-week moving average line. The weekly OBV line is positive while the MACD oscillator could resume its rise.
In this daily Point and Figure chart of UNH, below, we can see a potential downside price target in the $412 area but a trade at $464.60 will refresh the uptrend.
In this weekly Point and Figure chart of UNH, below, we can see a potential upside price target in the $614 area.
Bottom line strategy: In our October 14 review we wrote that "It looks like UNH is "off to the races" again. Traders who are not long could buy a morning dip to around $412 if available. Risk to $395." Traders could stay long UNH but raise stops to $425. The round number of $500 is our next price target.
