UNH runs into sellers around 312.25 for the third day in a row
UnitedHealth Group Incorporated (UNH) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UNH ended Wednesday at 306.52 edging lower $0.71 (-0.23%) on high volume, slightly underperforming the Dow Indu. (0.13%). Trading $3.18 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (UNH as at Sep 16, 2020):
Wednesday's trading range has been $6.05 (1.96%), that's below the last trading month's daily average range of $7.37. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for UNH. Prices continued to consolidate within a tight trading range between 303.01 and 312.25 where it has been caught now for the last three trading days.
Prices are trading close to the key technical support level at 302.38 (S1). After spiking up to 312.25 during the day, UnitedHealth Group found resistance at the 20-day moving average at 311.02. The last time this happened on September 9th, UNH lost -2.38% on the following trading day. United Health ran into sellers again today around 312.25 for the third trading day in a row after having found sellers at 311.46 in the previous session and at 311.12 two days ago.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for UnitedHealth Group. Out of 50 times, UNH closed higher 62.00% 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 74.00% with an average market move of 1.50%.