UnitedHealth Inches Toward New Highs

UnitedHealth rebounded from the coronavirus crash more quickly than most stocks. It was back above its 200-day simple moving average (SMA) in early April, 1-1/2 months before the broader S&P 500.

Then it stopped and waited, consolidating in a range and doing some important work technically.

First, it established support above $270. This was a key pivot from early February. Second, it started making higher lows. Finally, it made new all-time highs and then pulled back slightly. This creates the potential for a quiet breakout in coming sessions.

There’s also a potential channel between roughly $273 and $300. The price action since May 27 represents a breakout of that channel, followed by a successful retest.

UNH’s fundamentals are also interesting because the coronavirus pandemic has reduced doctor visits. That could lower the health insurer’s medical costs and drive margins higher the next time earnings are released in mid-July.

It’s also a member of the Dow Jones Industrial Average, which has been outshining the S&P 500 and Nasdaq-100 lately.

Overall, UNH isn’t flashy and hasn’t been moving much. But its chart patterns indicate it may start moving as prices inch back toward new highs.