Is this the moment UNH finally breaks down?
UNH UnitedHealth Group Inc (UNH) is one of the largest health care companies in the US, providing health insurance, health care services, and pharmacy benefits. The stock has been in a strong uptrend since March 2020, reaching an all-time high of $558.10 on October 31, 2022. However, since then, the stock has been showing signs of weakness and may be on the verge of a major breakdown.
Technical Analysis
Looking at the daily chart of UNH, we can see that the stock has broken a critical support zone of $476, which was the previous resistance level in July and August 2022. This zone also coincides with the 200-day moving average (MA), which is a widely followed indicator of long-term trend. The break below this zone indicates that the bulls have lost control and the bears are taking over.
The stock is currently retesting the $476 zone as resistance, which is a common phenomenon after a breakout. If the stock fails to reclaim this zone and closes below it, it would confirm the breakdown and open the door for further downside. The next support levels to watch are $450, which is the 50% Fibonacci retracement level of the March 2020 to October 2022 rally, and $420, which is the 61.8% Fibonacci retracement level and the previous support level in May 2022.
The technical indicators also support the bearish scenario. The MACD histogram has turned negative and crossed below the zero line, indicating a loss of momentum and a shift in trend. The RSI has fallen below 50 and is approaching the oversold territory, indicating a strong selling pressure. The volume has also increased on the downside, suggesting that more sellers are joining the market.
Conclusion
UNH has broken a critical support zone of $476 and is retesting it as resistance. If the stock fails to close above this zone, it would confirm the breakdown and signal a potential reversal of the long-term uptrend. The technical indicators are also bearish and point to more downside ahead. The next support levels to watch are $450 and $420.
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