UNH Should I Buy
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Not a good buy right now for an impatient investor. UNH is in a sharp downside trend after a major post-earnings reset, trading below key support (~291) with bearish momentum still expanding and no proprietary buy signals today. This looks more like a “stabilize-first” situation than an immediate entry.
Trend/Momentum: Bearish. MACD histogram (-6.798) is below zero and negatively expanding, signaling downside momentum is still building rather than bottoming. RSI(6) 24.76 is deeply oversold, which can produce bounces, but oversold alone is not a buy signal when MACD is still deteriorating.
Levels: Price (286-287) is below S1 (291.01) and approaching S2 (272.73). This suggests broken support and risk of continuation to the next support zone before a durable base forms. Pivot resistance sits far higher (~320.61), so any rebound faces heavy overhead supply.
Moving averages: Converging MAs suggests a transition phase, but given the large gap down and negative MACD, the setup still favors consolidation/downside chop rather than a clean uptrend resumption.
Near-term probabilities (pattern analog): Model indicates ~70% chance of a flat-to-slightly-down next day (-0.2%), but a potential rebound bias over 1 week/month (+5.82% / +8.01%). That rebound thesis is tactical and depends on stabilization above ~272-291.
increases the odds of a reflex bounce, especially if price reclaims ~291 and then challenges the ~320 pivot.
with MACD still worsening; downside continuation risk toward ~273 remains.
Latest quarter: 2025/Q4. Revenue grew to ~$113.215B (+13.11% YoY), but profitability collapsed: Net income ~$10M (-99.82% YoY) and EPS ~$0.01 (-99.83% YoY). This is a severe earnings quality red flag in the snapshot and aligns with the market’s sharp repricing. Even if some of this is one-time/noisy, the reported magnitude supports the market’s concern around cost trends and Optum/MA profitability visibility.
Trend: Broad price-target cuts across the Street (e.g., Barclays $391→$327; MS $409→$375; RBC $408→$361; Leerink $410→$345; Wells $400→$370; BofA $360→$315 with Neutral). Ratings mostly remain constructive (Overweight/Outperform/Buy), with BofA notably Neutral. Wall Street pros: (1) Many believe the selloff is overly harsh and that mitigation via pricing/actions plus clearer 2026 guidance can stabilize sentiment; (2) Most targets remain well above the current ~286 price, implying perceived upside if earnings visibility returns. Wall Street cons: (1) CMS MA rate uncertainty for 2027 and potential further program/risk-adjustment pressure; (2) Optum softness/restructuring and elevated cost trends reduce near-term confidence and raise the bar for a quick recovery.
