UnitedHealth Group Incorporated
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UNH Selloff Unreasonable - Still 15% ROI Short-Term

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Since my first UNH idea a couple of days ago the price of this stock dropped significantly. If you've been part of the first idea you should've been able to lock in around 1.x% of return when using a tight stop-loss. Otherwise you've been stopped out with break-even. Nevertheless, the sell-off was not helpful and is completely exaggerating the situation at UNH since the company is not really effected by the current PBM debate.

"Deutsche Bank sees a potential divestiture as not having a significant impact on earnings, estimating the risk at likely less than $200M of the company’s roughly $30B+ operating earnings. Deutsche Bank noted, however, that CVS (CVS), Cigna (CI) and UnitedHealth (NYSE:UNH) 'could face additional risk from losing the ability to vertically integrate the PBM, fulfillment and manufacturing functions of biosimilars through organizations like Cordavis and Quallent.' Despite concerns about the potential breakup of their pharmacy businesses, Deutsche Bank maintained it's buy rating on UnitedHealth (UNH)."

From a technical standpoint we can see a confluence of support:

  1. Weekly SMA200
  2. Strong Trendline from March 2020
  3. Horizontal Support at $480


UNH managed to bounce from the trendline intraday today. This could mean we're going to see a turnaround from here. If we break below the trendline on the daily chart this trade will be invalidated. Otherwise our target sits at $550.
トレード稼働中
The bounce came, and trade is active. Since the Fed meeting, the market has been a little bit all over the place, with US bonds rising and putting pressure on the market. So far, UNH stands the test. We could also see the bottom for US100 here, and VIX could come back down. Let's see if we hold.

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