Elevance Health Plunges 5.18%—Is the Bear Market's Grip Unshakable?

Summary
• Elevance Health (ELV) trades at $281.25, down 5.18% from its previous close of $296.60
• Intraday range spans $279.76 to $295.68, reflecting sharp volatility
• CEO Gail Boudreaux's $2.44 million share purchase contrasts with a 18% EPS decline and 42% annual price drop
• Sector peers face ACA premium hikes and policy uncertainty, amplifying investor caution

Today’s 5.18% sell-off in Elevance Health underscores a perfect storm of earnings underperformance, sector-specific policy risks, and deteriorating fundamentals. With the stock trading near its 52-week low of $274.40 and technical indicators flashing bearish signals, the question looms: Is this a short-term correction or the beginning of a deeper selloff?

Earnings Miss and ACA Headwinds Trigger Sell-Off
Elevance Health's 5.18% intraday drop stems from a confluence of factors. The company reported Q2 EPS of $8.84, missing estimates by $0.46, while revenue grew 14.3% to $49.42 billion but fell short of $48.26 billion guidance. Compounding the issue, sector-wide ACA premium hikes—projected to spike in 2026—have spooked investors, with insurers likely to propose steep rate increases. This aligns with broader policy uncertainty under Trump’s Medicaid cuts and rural health fund constraints, creating a dual threat to margins and market sentiment.

Health Care Sector Suffers as ACA Uncertainty Looms
The health care plans sector is under pressure, with UnitedHealth Group (UNH) down 3.83% intraday. While Elevance Health’s drop is steeper, both stocks face similar headwinds from ACA policy shifts and Medicaid funding reductions. UNH’s larger size and diversified exposure offer some resilience, but the sector’s collective 4% decline signals a systemic bearish trend. Investors are pricing in regulatory risks and margin compression, with Elevance Health’s lower leverage ratio (8.07x) amplifying its vulnerability to sector-wide sell-offs.

Options and Technical Plays for a Volatile ELV
• 200-day MA: $400.34 (well above current price), 30-day MA: $352.74 (bearish divergence)
• RSI: 26.83 (oversold territory), MACD: -24.02 (bearish), Bollinger Bands: $267.86 (lower band near support)
• Key Levels: $274.40 (52W low), $339.79 (middle band), $400.34 (200D MA)

Two options contracts stand out for bearish exposure. The ELV20250815P270 put option (strike $270, expiring 8/15) offers a 53.74% leverage ratio and -0.3066 delta, with 35.99% implied volatility. At a 5% downside to $267.19, its payoff would be $2.81 per contract. The ELV20250815P280 put (strike $280) provides 31.23% leverage and -0.4586 delta, with a projected $10.19 payoff under the same scenario. Both options exhibit strong liquidity (turnover $184,739 and $190,056) and high gamma (0.0138 and 0.0162), making them ideal for short-term bearish bets. Aggressive traders should prioritize these puts if the $274.40 level breaks, while long-term investors may consider waiting for a bounce above $339.79.

Backtest Elevance Health Stock Performance
The ETF ELV has historically shown resilience following a -5% intraday plunge. The 3-Day win rate is 50%, the 10-Day win rate is also 50%, and the 30-Day win rate is 50%, indicating that the ETF tends to bounce back over various short-term horizons. The maximum return observed was 3.02% over 30 days, suggesting that while there may be some short-term volatility, ELV has the potential for positive returns in the aftermath of a significant intraday decline.

Bearish Momentum Intensifies—What’s Next for ELV?
Elevance Health’s 5.18% drop aligns with a deteriorating technical landscape and sector-wide policy risks. With RSI near oversold levels and the stock trading below all major moving averages, the immediate outlook remains bearish. However, the 52W low at $274.40 offers a critical support level to monitor. Sector leader UnitedHealth’s 3.83% decline suggests systemic pressure, but its larger size may provide a relative floor. Investors should prioritize the ELV20250815P270 and ELV20250815P280 puts for short-term bearish exposure while watching for a potential rebound above $339.79. If the $274.40 level holds, a test of the 200D MA at $400.34 could follow—but for now, the path of least resistance is downward.