UnitedHealth under pressure

At Tricio we look at charts in order to gauge investor behaviour and sentiment. The UnitedHealth Group (health insurance and health care) share price has been under pressure since the Trump tariff scare last April. The weekly semi-log chart below (with 13 and 50-week moving averages) shows that the 50-week moving average (blue line) capped the attempt to rally over the last few weeks.

The announcement from the administration that they plan to keep 2027 reimbursement payment rates near flat hit sentiment after-hours on Monday. The softer than expected Q4 results on Tuesday saw the sell-off in the share accelerate. Of note is that many analysts and funds seem to be looking for reasons to look for the upside in the share, despite the sell-off of the last year and big selloff over the last day.

This seems fair enough. The company does make a lot of money and we all know that stock market sentiment can be fickle. We all know that some shares have rocketed higher over the last few years seemingly on the back of AI/robotics/autonomous technology and a lot of hope with regards to making money. So to some it may seem odd that a company can announce forecasts for ‘as expected’ earnings for 2026 and see the share price fall by over -15% on the day.

The UNH chart does suggest that the back of the bull trend was broken last year. Watch the red line near $242 now as a break of this support line (or demand line), if seen, would suggest that buyers are not stepping in where they ‘should have’. Chart objectives would be near $85 on simple extensions if a break below this line does take place. Bulls? Need to see the line at $242 hold, and ideally a push above the 50-week moving average to show that sentiment is improving. If this is seen then some chance of seeing the highs retested could build.

The broader sector (using the SPDR Health Care Select ETF (XLV) as a proxy) chart below shows the underperformance of the share relative to the sector. The sector set new all-time highs recently and is in an uptrend. Watch the 13 and 50-week moving averages as well as the rising purple line here as support (demand) for the share. Losing these would suggest that a broader pullback is at risk and the focus would be on the flat red line near $120/$119 then.

 Gerry Celaya, Chief Strategist