UNH Options Signal Bullish Bias: 350 Call OI Surge and Oversold RSI Point to Potential Breakout

• UNH’s price dropped 0.87% to $336.12, trading near its 30D support level of $321.56.
• Call open interest (OI) at $350 is 5,498 for next Friday, dwarfing put OI at $315 (7,396) and signaling a bullish skew.
• RSI at 36.01 suggests oversold conditions, while Bollinger Bands show price is near the lower band ($312.69).

Here’s the takeaway: The options market is betting on a rebound, but regulatory risks loom. Let’s break it down.

Bullish Army vs. Bearish Defense: Decoding the Options Setup

The options chain tells a story of cautious optimism. For Friday expiration, call OI peaks at $350 (4,903) and $345 (4,400), while puts dominate at $315 (3,101) and $310 (2,342). But next Friday’s data is even more telling: call OI at $400 (9,460) and $360 (7,386) dwarfs put OI at $300 (7,396) and $220 (6,843). This suggests a “bullish army” is positioning for a rebound above $340, while a “bearish defense” is hedging against a drop below $320.

The put/call ratio of 0.475 (OI-based) confirms the imbalance—traders are buying more calls than puts. But here’s the catch: if the stock fails to break above $339.03 (intraday high), the bearish puts at $315 and $310 could trigger a selloff. The lack of block trades means no big institutional bets to sway the tide, so retail sentiment is in the driver’s seat.

Regulatory Headwinds vs. Earnings Resilience: The News Narrative

UnitedHealth’s antitrust woes are no secret. The DOJ’s probe into Optum’s vertical integration has investors spooked, and Pelican Bay Capital’s bearish take on Medicaid/Medicare margins hasn’t helped. But here’s the flip side: the company just raised its full-year earnings outlook and announced a $2.10 dividend (2.64% yield). This duality creates a tug-of-war—regulatory risks cap upside, but earnings resilience and dividend yields attract income seekers.

The market’s reaction? A mixed bag. While the stock’s 7% monthly drop reflects fears, the 6.1% operating margin (highest in the sector) and 10.5% revenue growth show UNH isn’t backing down. The key question: Can the company balance regulatory compliance with growth? Until the DOJ’s probe clarifies, the stock will likely trade in a tight range.

Actionable Trades: Calls for Breakouts, Puts for Safety

For options traders, the 350-strike calls expiring next Friday (OI: 5,498) are a prime play. If UNH breaks above $338.45 (today’s open) and holds above $331.79 (intraday low), these calls could capitalize on a rebound toward $350. A $350 call with a $336.12 entry (current price) offers leverage if the stock surges. Stop-loss below $322.52 (30D support) would limit downside.

For bearish protection, the 315-strike puts (OI: 3,101) are a hedge. If the stock dips below $322.52, these puts could profit from a drop to $315. But watch the 30D support at $321.56—if it holds, the bearish case weakens.

Stock traders should consider entry near $322.52 (30D support) with a target at $350. A break above $339.03 (intraday high) would validate the bullish case. Conversely, a close below $321.56 (200D support) could trigger a deeper pullback to $312.69 (Bollinger lower band).Volatility on the Horizon: Balancing Risks and Rewards

The coming weeks will test UNH’s resolve. Regulatory scrutiny could force a sell-off, but oversold RSI and Bollinger Bands hint at a rebound. The options market’s bullish skew suggests traders expect a rebound, but the bearish puts at $315 and $310 are a reminder that risks remain. For now, the stock is caught between a rock (antitrust fears) and a hard place (margin pressures). But if the bulls hold the line at $322.52, the path to $350 could open. Stay nimble—this is a stock where sentiment shifts fast.

Bottom line: UNH is a high-risk, high-reward play. The options data and technicals lean bullish, but regulatory risks mean volatility isn’t going away. Position accordingly.