UNH's latest peak comes amid low implied volatility
The shares of healthcare concern UnitedHealth Group Inc (NYSE:UNH) are up 1.2% at $372.77 this afternoon, and hit an all-time high of $373.56 earlier today. Plus, the equity is up 69.5% year-over-year, with support from its 10-day moving average. More record highs could be in store for UNH over the coming weeks, too, per a historically bullish signal now flashing on the charts.
Specifically, UnitedHealth stock's peak comes amid historically low implied volatility (IV), which has been a bullish combination for the security in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been four other times in the past five years when the security was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is now the case with the equity's SVI of 25%, which sits in the fourth percentile of its 12-month range.
White's data shows that a month after these signals, UNH was higher in 75% of those instances, averaging a 3.7% return for that time period. From its current perch, a similar move would put UnitedHealth stock just over the $386 level, at yet another record peak.
Lastly, United Health stock ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 17 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making UNH a potential premium-selling candidate.