UnitedHealth Group Incorporated Price Analysis Powered by AI

UNH: Capitulation Low Sets Stage for Explosive Short-term Bounce After Historic Crash

From January to mid-April 2025, UNH traded between $510-$600, maintaining a relatively stable, albeit slightly downward trend after peaking near $606 (2025-04-11).
On April 17, a catastrophic drop occurred from about $585 to $454 on record volume (~29M shares in one day), indicating a significant event or news catalyst. This signifies a breakdown of any prior support or accumulation zones.
After this, UNH entered a sustained bear market: prices continued decreasing with little relief, hitting new multi-year lows in mid-May.

In the last three sessions, the chart shows two gargantuan volume, high-narrative panic selling days:
- May 13: Close $311.38 (Volume: 59.5M)
- May 15: Close $274.35 (Volume: 121.8M, nearly double the previous day, indicating climax sell-off)
- May 16 (Current): Close $291.91 (Strong bounce, Volume: 68.6M)
Friday, May 16, UNH gapped higher and staged a recovery rally, finishing up over 6% from the prior close, as shown in both daily and intraday data.

Opened at $279.29, dipped as low as $269.15 (testing new lows), then buyers stepped in strongly.
By 14:30, strong demand pushed it up to $291.91 (close), with a high corresponding to post-panic buying.
Volume trended very high all session, especially in the 16:30-18:30 period, signaling heavy institutional activity.

Pre-crash major support: $500 (broken decisively)
Pre-crash psychological level: $400/$450 (broken decisively)
Post-crash gap support: $269.15–$274.35 (May 15-16 lows)
Immediate resistance: $294.5 (May 16 session high), $310 (May 13 close), $335 (May 13 open)
Potential gap fill targets: $350+, but only if a relief rally develops

May 13 and May 15: Extremely wide-ranging, high-volume red candles (capitulation move).
May 16: Long lower wick (aggressive buying below $275), closing near highs (bullish reversal/hammer). Huge volume confirms significance.
High selling climax often marks exhaustion and bottoms (at least for a dead-cat bounce).

Analysis by candle patterns and high-magnitude move suggests RSI would be below 20-25, deep in oversold territory.
Markets entering such oversold conditions after a parabolic selloff are prone to at least strong relief bounces.

Massive downward movement; histogram likely at a negative peak, signaling bearish momentum is overextended.
Current short-term momentum reversal is possible, as seen by the intraday comeback and hammer candle.

Volume spikes in down moves and the reversal day (May 16) indicate possible exhaustion of sellers: classic bottoming signal.

Multiple huge gap-downs in a row, extremely heavy volume, and intraday reversal patterns are all classic attributes of a selling climax/bottom.

The long lower shadow on May 16, closing at highs, suggests the possibility of at least a multi-day V-reversal or a sharp, short-term relief rally.

A move as violent as this often traps late shorts and initiates a bounce. Historical pattern-matching suggests that after two days like May 15-16, large caps such as UNH tend to rebound 10-20% from the lows in the following week.

Extreme deviations from moving averages suggest mean-reversion potential.
z-score for price deviation (based on prior 60-day average) is likely > -5, statistically significant, implying high probability of a bounce.

The market's panic seems event-driven (regulatory, legal, or earnings shock). If the underlying event does not threaten business viability, rebounds can be fierce.
However, longer-term downtrend is still in place; this is a tactical trade, not a long-term bottom call.

All indicators – technical, pattern-based, and volume analytics – point to May 16 being a candidate for at least a tactical bottom. The reward/risk for a counter-trend bounce is favorable, as risk (new lows below $270) is known, and reward (move to $310-335 gap, or even $350 in an aggressive scenario) is much higher.
Bear in mind: dead cat bounces after such crashes rarely recover to pre-crash levels quickly; but short-term long positions offer favorable risk/reward.

Position: BUY/Long
Rationale: Technical climax, deep oversold, volume-confirmed bullish reversal pattern, favorable risk/reward for a bounce.
Preferred Entry (open) price: After retracements to $288-$290 if possible, otherwise current levels ($291.91) are acceptable due to bullish close.
Target (close) price:
- Conservative: $310 (recent breakdown level/May 13 close)
- Aggressive: $335 (gap fill towards May 13 open, requires strong follow-through)