Tradzar
UnitedHealth Group Incorporated Price Analysis Powered by AI
UNH After a Capitulation Crash: Reflex Rally Stalling Under $295—High Odds of a Retest
1) Market structure & regime (daily)
Context: UNH has experienced a major regime break.
- Pre-shock trend (Oct–mid Jan): Price oscillated but generally held the low-to-mid 300s, with repeated acceptance around 320–340 and spikes into 350–360. This was a stable, mean-reverting up/sideways regime.
- Shock event (2026-01-27): A single-day collapse from the prior day close 351.64 to 282.70 (intraday low 280.40) on ~65.8M volume (multiple times normal). This is classic capitulation / repricing behavior.
- Aftershock day (2026-01-28): A strong rebound close 294.02 (high 294.94) on heavy but lower volume (~23.2M). This looks like a dead-cat bounce / reflex rally after liquidation.
Implication: The dominant feature is a new downtrend with extremely elevated volatility. Even though today bounced, the market is still digesting the gap-down and supply overhead.
2) Gap analysis, supply/demand zones, and key levels
Major gaps / voids
- Gap/air pocket: From roughly 300 up to 340+ (where price previously traded) now represents a large overhead supply zone. Many trapped longs may sell into rallies.
Horizontal levels from the data
- Immediate resistance (near-term):
- 295.0–299.5 (today’s high ~294.94 and prior day’s intraday bounce zone; also psychological 300)
- 310–314 (former supports in Nov: 309–313 area saw multiple closes)
- Immediate support (near-term):
- 292–293 (late-session consolidation area)
- 283–285 (today’s earlier trading / hourly base)
- 280.4 (capitulation low; critical “line in the sand”)
Interpretation: Price is currently below a dense band of prior value; rallies into 295–300 are likely to meet supply. Supports are relatively thin until 285 and then 280.
3) Candlestick / price action read
- 2026-01-27: Large bearish range bar with huge volume = breakdown + forced selling.
- 2026-01-28: Bullish rebound day, but it did not reclaim any meaningful prior structure (still far below 320–340). This is consistent with short-covering + bargain hunting, not necessarily trend reversal.
- Intraday (hourly 01-28): Strong push from ~283–285 into ~294.5, then stalling and choppy consolidation under 295. This is typical of a bounce running into first supply.
Bias from price action: Bearish-to-neutral for the next 24h, with elevated probability of a pullback/retest.
4) Trend indicators (qualitative, based on closes)
Even without exact calculations, the move implies:
- Moving averages (20/50/100/200): Price at 294 is almost certainly below key MAs that were previously centered in the low-to-mid 330s.
- Slope: All short-to-intermediate trend measures will have turned down sharply due to the single-day collapse.
Implication: Trend-following systems will still read short; rallies are counter-trend until price reclaims at least the low 320s.
5) Momentum (RSI/MACD style inference)
- The 01-27 crash likely pushed daily RSI into oversold territory.
- 01-28 rebound is consistent with an oversold bounce, which often fades after 1–3 sessions unless strong follow-through appears.
- MACD-type momentum would still be deeply negative and just beginning to decelerate.
Implication: Oversold can fuel bounces, but momentum regime remains bearish; oversold in a new downtrend often becomes “sticky” and does not guarantee reversal.
6) Volatility, ATR, and risk conditions
- 01-27 range: 299.5–280.4 (~19.1 points) plus a massive gap from the prior close.
- 01-28 range: ~11.2 points (283.79–294.94).
Implication: ATR has exploded; in the next 24h, wide swings (±3–6%) are plausible. This environment favors mean-reversion intraday, but the larger swing bias remains down until proven otherwise.
7) Volume profile / capitulation logic
- Capitulation volume (01-27) suggests a major transfer of ownership.
- The next day bounce on lower volume often indicates short-covering more than genuine accumulation.
Implication: After a capitulation + bounce, a common path is:
- Bounce into first resistance,
- Pullback to retest (often partially filling the bounce),
- Either base and recover slowly, or roll over into a second leg down.
Given price stalled under ~295, the retest scenario is favored.
8) Pattern framing: breakdown → reflex rally → retest
This resembles a classic breakdown-and-retest setup:
- Breakdown: 351 → 282
- Reflex rally: 282 → 294
- Next 24h expectation: retest of 285–288, with risk of printing 283 and possibly 280–281 if sellers reassert.
A clean push above 300 and acceptance there would weaken the short thesis; but absent that, probability favors lower.
9) 24-hour forecast (directional + levels)
Base case (higher probability):
- Fade / pullback from the 293–295 area into 288–285.
- Possible intraday wick toward 283–284.
Alternative bullish continuation (lower probability):
- Break and hold above 295, then test 299–300, possibly 305.
Failure / renewed selloff (tail risk but real in this regime):
- Lose 283–284 → quick move toward 280.4 and potentially below (new lows) if news/flow continues.
Net: Bearish bias over next 24 hours, but with high volatility and potential sharp counter-trend spikes.
10) Trade plan logic (why short here)
- You’re in a post-gap, post-capitulation environment.
- Current price (~294) is pressing into first supply (295–300).
- Risk/reward favors shorting into resistance with a target toward the retest zone (285–288).
Final call
Decision for next 24h: SELL (Short bias).
Note: This is a technical, probability-based view from the provided chart only; gap events are often news-driven and can remain erratic.