Buy the Dip on This Blue Chip Before Earnings

UnitedHealth could be flashing 'buy,' if history is any indicator

Managing Editor
Oct 12, 2017 at 3:09 PM
facebook X logo linkedin


Health insurance stock UnitedHealth Group Inc (NYSE:UNH) is down 0.8% today at $193.61, with healthcare stocks in focus after President Trump signed an executive order aimed at rolling back parts of Obamacare. However, UNH shares are now trading just above their 80-day moving average, a trendline that has had bullish implications in the past. If history repeats, UNH stock could be headed back toward record highs after earnings next week.

According to Schaeffer's Senior Quantitative Analyst Rocky White, UNH stock is now trading within one standard deviation of its 80-day moving average, after a lengthy stint above this trendline. Following the last nine pullbacks to this moving average, UNH was up 2.96% one month later, and was higher 75% of the time. A similar 2.96% rally would place UnitedHealth stock just under $200 -- close to its Sept. 13 record high of $200.76.

Daily Chart of UNH Since Jan 2017 With 80Day

UnitedHealth is set to report earnings before the open on Tuesday, Oct. 17. The stock has reacted positively the day after earnings in six of the past seven quarters. After the blue chip's last October earnings report, UNH stock surged 6.9% in the subsequent session.

However, most short-term options traders are already bullish on UNH. Its Schaeffer's put/call open interest ratio (SOIR) of 0.78 ranks in only the 3rd percentile of its annual range, suggesting near-term options traders have rarely been more call-biased during the past 12 months.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI