UnitedHealth Stock Eyes Bounce Off Familiar Trendline

Year-over-year, the security maintains an over 26% lead

Digital Content Manager
Jan 10, 2022 at 3:38 PM
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UnitedHealth Group Inc (NYSE:UNH) is up 1.2% to trade at $464.20 this afternoon, after the equity earned a price-target hike from Bernstein to $564 from $508. A floor at the $455 level is also containing UNH's pullback from a Dec. 30, all-time high of $509.23, helping it maintain a 27.8% year-over-year lead. Plus, the security's latest bear gap has placed it back near a trendline with historically bullish implications -- the same one that has preceded record peaks before.
 
The trendline in question is UnitedHealth stock's 80-day moving average. The shares are now within just one standard deviation of this trendline, after a couple of months spent well above it. According to new data from Schaeffer's Senior Quantitative Analyst Rocky White, six similar signals were observed over the past three years. UNH enjoyed a positive return one month later in 80% of those cases, averaging an 2.7% gain. From its current perch, a comparable move would place the stock back above $475.

 

UNH 80 Day

The brokerage bunch is already bullish towards UnitedHealth stock. Of the 20 analysts in question, 17 carry a "buy" or better rating, while only three call it a tepid "hold.". Plus, the 12-month consensus target price of $511.11 is a 10.4% premium to the security's current perch.

The equity could still benefit from a shift in the options pits, though, per UNH's 50-day put/call volume ratio of 1.62 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 97% of readings from the past year, indicating a strong inclination for long puts recently. 

Echoing this, short-term options players have rarely been more put-biased in the past year. This is per UnitedHealth stock's Schaeffer's put/call open interest ratio (SOIR) of 1.22, which stands higher than 78% of readings from its annual range.

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