UNH closes lower for the 2nd day in a row
UnitedHealth Group Incorporated (UNH) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UNH ended the month 2.65% higher at 302.78 after losing $2.45 (-0.8%) today on high volume, significantly underperforming the Dow Indu. (0.44%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (UNH as at Jul 31, 2020):
Friday's trading range has been $5.69 (1.88%), that's below the last trading month's daily average range of $7.24. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UNH.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 298.05 during the day, the share found support at the 50-day moving average at 298.83. After having been unable to move lower than 298.89 in the previous session, the market found buyers again around the same price level today at 298.05. The last time this happened on Tuesday, UNH gained 2.25% on the following trading day.
Although UnitedHealth Group is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the close-by swing high at 309.75 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 297.21 where further sell stops might get triggered. With prices trading close to this year's high at 315.84, upside momentum could speed up should the stock be able to break out to new highs for the year. As prices are trading close to July's high at 310.97, upside momentum might accelerate should United Health mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for UnitedHealth Group. Out of 695 times, UNH closed higher 57.99% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.88% with an average market move of 1.30%.