UnitedHealth Group (UNH) shares experienced a significant rebound on Friday after plummeting to a five-year low due to an investigation by the Department of Justice regarding possible Medicare fraud allegations. Recently, the stock has faced numerous challenges, including a 22% drop last month when the company revised its full-year profit forecast downward and an additional 18% decline following the announcement of CEO Andrew Witty stepping down.
Despite the recent gains, the stock remains more than 50% below its value from a month ago, largely due to rising medical costs and broader industry challenges. On the technical side, the relative strength index (RSI) indicates oversold conditions after breaking below key moving averages in mid-April.
Two major support levels are worth noting: $249, which aligns with trading activity from January 2018 to April 2020, and $212, near a horizontal line connecting multiple troughs since March 2018. On the upside, investors should monitor the $325 resistance level, with a potential climb toward $365 if this level is reclaimed.
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