Taking a look at UnitedHealth Group as it seems a possible breakout toward the upside on the monthly chart has now occurred. Currently, in the pre-market the healthcare giant’s shares are floating at around $592.49 a share. A move above the all-time high of $569.45 happened in July month, with a strong close at $578.09. In theory, this is a bullish indication and could see the price grind higher over the next 12 months. This is more so as the Federal Reserve is expected to begin its rate-cutting cycle from Wednesday, and based on the research on our website, healthcare is one of the sectors that tends to perform better following the first cut relative to the broader market. However, this is not guaranteed that every stock within the sector will perform. Since this possible breakout move, the gains have been somewhat limited. Most likely held back due to uncertainty over the Fed’s decision and US elections. From a momentum based perspective, we can see the MACD has turned positive and the RSI is already positive as it reads 66. Further strengthening the bullish bias in this scenario. As the stock is now trading at all-time highs, there is no technical resistance above. It is said by analysts that markets tend to find resistance around whole numbers when there is no clear resistance, therefore, it can be argued that $600 is the near-term resistance, followed by $650 and then $700. Towards the downside, the near-term support may now be the level of $569.45 (previous key resistance). A move back below this level may see investors look towards $494, which sits along the supportive trendline.

 

Key Note: According to Hedge Follow, UnitedHealth Group is the second most owned healthcare stock by hedge funds.

 

(Sources: hedgefollow.com)