Elevance Health Plummets 0.9% Amid Regulatory and Market Turbulence – What’s Next?

Summary
• Elevance Health (ELV) trades at $354.92, down 0.9% intraday with a 52-week range of $273.71–$510.24.
• Intraday swing spans $352.03 to $361.64, reflecting heightened volatility.
• UnitedHealth (UNH) declines 3.4%, signaling sector-wide pressure.

Today’s selloff in Elevance Health underscores a broader malaise in the healthcare insurance sector, driven by regulatory uncertainty and shifting investor sentiment. With the stock trading near its 200-day moving average of $369.86, traders are bracing for a critical test of support as sector peers like UnitedHealth face similar headwinds.

Medicare Advantage Star Ratings and Sector Volatility Drive ELV's Intraday Slide
The 0.9% decline in ELV follows a Healthcare Dive report highlighting the 2026 Medicare Advantage star ratings, which have sparked concerns over premium stability and regulatory scrutiny. While Elevance Health itself has not issued material news, the sector’s sensitivity to policy shifts—exacerbated by UnitedHealth’s 3.4% drop—has amplified risk-off sentiment. Additionally, Cantor Fitzgerald’s recent overweight rating on ELV contrasts with broader market skepticism, creating a tug-of-war between fundamental optimism and near-term technical pressures.

Healthcare Insurance Sector Under Pressure as UnitedHealth Leads Decline
The healthcare insurance sector, led by UnitedHealth’s 3.4% intraday drop, is experiencing a synchronized selloff. Elevance Health’s -0.9% move aligns with sector-wide jitters over rising benefit ratios and regulatory audits. While ELV’s dynamic P/E of 10.18 suggests relative value, the sector’s exposure to ACA policy debates and CMS audits has overshadowed its fundamentals, creating a fragile environment for near-term gains.

Options and ETF Strategies Amid Elevated Volatility
• MACD: 11.97 (above signal line 7.96), RSI: 80.29 (overbought), 200D MA: $369.86 (above current price).
• Bollinger Bands: Upper $364.66, Middle $328.20, Lower $291.74. Key support/resistance clusters at $307.86–$308.97 and $388.59–$392.16.

Top Options Contracts:
• ELV20251017P350 (Put): Strike $350, Expiry 2025-10-17, IV 36.87%, Leverage 66.23%, Delta -0.38, Theta -0.05, Gamma 0.0197. Turnover: 438,501. This put option offers asymmetric upside in a 5% downside scenario (projected payoff: $1.82/share), leveraging high gamma and moderate IV for volatility-driven gains.
• ELV20251017C360 (Call): Strike $360, Expiry 2025-10-17, IV 38.21%, Leverage 60.37%, Delta 0.42, Theta -0.88, Gamma 0.0194. Turnover: 26,749. This call benefits from strong theta decay and moderate delta, ideal for a rebound above $360. Projected payoff in a 5% downside: $0.00/share, but high gamma ensures responsiveness to price swings.

Action: Aggressive short-term traders should prioritize the ELV20251017P350 put for volatility capture, while directional bulls may test the ELV20251017C360 call if $360 breaks. Watch for a breakdown below $350 to validate bearish momentum.

Backtest Elevance Health Stock Performance
The requested back-test has been completed. I have prepared an interactive report so you can inspect the full statistics, equity curve and trade table directly.(just scroll the chat if the panel does not appear automatically)Key modelling choices (auto-filled for you):1. Period: 2022-01-03 to 2025-10-10 (full data range since 2022).2. Price series: daily close (intraday tick data unavailable over the full horizon; the close-to-close drop is a robust proxy for ≥ −0.9 % intraday selling pressure).3. Exit rule: next-day close; no extra risk controls applied.Feel free to review the panel and let me know if you’d like to try alternative exits (e.g., holding N days, stop-loss / take-profit) or add comparative benchmarks.

Position for the October 17 Expiry – Short-Term Volatility Presents Opportunities
Elevance Health’s near-term trajectory hinges on its ability to hold above $350 and retest the 200-day moving average. With UnitedHealth (UNH) down 3.4% and sector-wide regulatory risks unresolved, traders should prioritize options with October 17 expiry to capitalize on short-term volatility. The ELV20251017P350 put offers a compelling risk-reward profile, while the ELV20251017C360 call provides directional exposure. Watch for a breakdown below $350 or a surge above $361.64 to dictate next steps.