UnitedHealth Stock Could Soon See More Record Highs

UNH sports a roughly 29% year-over-year lead

Digital Content Manager
Oct 18, 2021 at 2:06 PM
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The last time we checked in on UnitedHealth Group Inc (NYSE:UNH), the blue-chip concern was eyeing a bounce off the 80-day moving average. A few weeks later, the security scored an Oct. 14, all-time high of $433.50, bringing its year-over-year lead up to roughly 29%. Though UNH has been cooling from that peak, down 0.6% to trade at $425.66 this afternoon, there is reason to believe this pullback may be a short-lived one. Specifically, UnitedHealth stock is flashing yet another historically bullish signal, which may launch it even higher in the coming weeks. 

Digging deeper, the security's record high comes amid historically low implied volatility (IV), which has been a bullish combination for UnitedHealth stock in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there were six 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 currently the case with UNH's SVI of 17%, which sits in the 4th percentile of its 12-month range.

White's data shows that one month after these signals, the equity was higher 67% of the time, averaging a 5% return for that period. From its current perch, a similar move would put UNH at a brand-new all-time high of $446.94.

UNH 80 Day

Additional tailwinds could come from a shift in the options pits. This is per UnitedHealth stock's 50-day put/call volume ratio of 1.24 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 93rd percentile of its annual range. This indicates long puts are getting picked up at a faster-than-usual clip.  

It's also worth noting that UNH received two bull notes today. Bernstein and BMO raised their price targets to $508 and $475, respectively. 

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