Why unh is oversold?

UnitedHealth Group (UNH) is considered oversold for several reasons:

1. Technical Indicators Suggest Overselling: UNH's Relative Strength Index (RSI) has hit 29.5, which is very close to the oversold threshold of 30. This indicates that the stock may have been sold off too aggressively, leaving it potentially due for a rebound.
2. Recent Price Declines Due to Specific Factors: UNH has experienced significant drops, around 40% year-to-date, primarily due to:
   • Medicare Advantage Segment Issues: Rising medical costs, especially in the Medicare Advantage segment, are compressing margins. Higher-than-expected patient volumes, particularly for high-acuity cases, are straining profitability. Additionally, issues with the structure of the Medicare Advantage program, where UnitedHealthcare cannot adjust pricing until 2026, are expected to persist throughout 2025.
   • Investor Sentiment and Market Turbulence: The stock's decline is also due to broader market factors, including investor sentiment and turbulence. The Department of Justice's investigations into the company, the order by President Donald Trump that seeks to restrict how much drugmakers can charge, and the departure of the firm's CEO have all contributed to the negative sentiment surrounding UNH.
3. Insider Activity and Dividend Yield: Despite the downturn, insiders are showing confidence with substantial investments, and the company continues to pay dividends, yielding around 2.8%, which is attractive to income-focused investors, potentially drawing in buyers who see the oversold condition as a buying opportunity.
4. Market Perception and Analyst Ratings: Despite the challenges, analysts maintain a positive outlook, with a consensus rating of "Buy" and an average price target of $444.9, suggesting potential for recovery.