Market Prices in Major Post-Earnings Swing for UnitedHealth Stock

Short-term traders have been quite call-skewed toward the Dow name

Managing Editor
Jul 16, 2018 at 3:06 PM
facebook X logo linkedin

Insurance concern UnitedHealth Group Inc (NYSE:UNH) is one of many Dow components preparing to report earnings, with the company scheduled to reveal its second-quarter results before the open tomorrow. UnitedHealth stock has been on a long-term uptrend, with recent pullbacks contained by the 30-week moving average. However, UNH was down 0.7% at $257.14, at last check.

Weekly Chart of UNH with 30MA

Digging into earnings history, UNH has closed higher the day after the company reported in all but one of the past eight quarters -- including the last five in a row. On average, the shares have swung 2.6% in the subsequent session over this two-year time frame, regardless of direction. This time around, the options market is pricing in almost double that, expecting a 5% move for Tuesday's trading.

Short-term traders are more call-skewed than usual toward the Dow stock, since UNH's Schaeffer's put/call open interest ratio (SOIR) of 0.53 ranks in the 2nd annual percentile. The July 260 call is home to peak call open interest of 5,952 contracts, but data from the major options exchanges points to heavy amounts of sell-to-open activity. As such, many have speculated that the security will hold below the $260 level through the coming weeks.

What's more, analyst attention has been very optimistic towards UnitedHealth stock, with all of the 16 brokerage firms following it sporting "buy" or "strong buy" ratings. Further, UNH's average 12-month price target of $280.33 sits at a nearly 9% premium to current levels.


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI