Trading in UnitedHealth Group Incorporated (UNH) was subdued on Monday, following a significant drop of over 20% on Friday. The company revised its annual guidance downward to $26.00 to $26.50 per share from nearly $30.00 per share previously. Despite this, the selloff may be nearing its end. Our trading team has identified UNH as the Stock of the Day due to potential support at previous bottom levels.
The phrase ‘buy at former bottoms’ reflects the idea that when a stock revisits a price level that acted as support in the past, it may do so again. Since January 2022, UnitedHealth has tested the $435.00 level seven times, finding support each time and subsequently rallying.
Currently, the stock is approaching this critical level once more. In downtrends, there are typically more sellers than buyers, pushing prices lower. However, support zones represent areas where buying interest is strong enough to halt declines. If buyers at these levels anticipate higher prices, they may increase their bids, potentially sparking an uptrend.
This scenario could unfold again with UnitedHealth.
— new from Benzinga