UNH Options Signal Bullish Momentum: Call Open Interest Surges at $370 Strike, Suggesting Upcoming Breakout Potential

• UnitedHealth Group (UNH) trades at $344.47, down 0.32% from its $347.93 open amid a short-term bullish trend.
• Options data reveals a 0.49 put/call open interest ratio, with top OTM calls concentrated at $370 (OI: 5,329) and $350 (OI: 5,091) for Friday expiration.
• Technical indicators show RSI at 67.5 (overbought threshold near 70) and MACD near its signal line, hinting at potential exhaustion in the current rally.

The options market and technicals are painting a clear picture: UNH is poised for a directional move, with bullish positioning dominating ahead of Friday’s expiry. The surge in call open interest at key strikes suggests institutional bets on a breakout above $349.97, the intraday high. Traders ignoring this setup risk missing a high-probability trade as volatility compresses ahead of expiration.

Bullish Sentiment Embedded in Options Structure

The OTM call options distribution reveals a striking imbalance. For Friday expiration, the $370 strike (OI: 5,329) and $350 strike (OI: 5,091) dominate, representing over 30% of total call open interest. This concentration implies significant capital is positioned for a price surge above $349.97, with $370 acting as a psychological threshold. By contrast, put open interest is muted, with the top OTM puts at $300 (OI: 2,437) and $340 (OI: 2,411), reflecting minimal bearish hedging.

The 0.49 put/call open interest ratio (calls: 1,176,818; puts: 575,905) underscores aggressive bullishness. While this could signal a crowded trade, it also aligns with technicals: UNH’s RSI at 67.5 and MACD histogram (-0.61) suggest momentum is intact but nearing overbought territory. The danger lies in a false breakout—failure to clear $349.97 could trigger profit-taking, dragging the stock toward the 30D support zone ($302.70–$304.34).

Absence of News Amplifies Options-Driven Narrative

With no material news driving UNH recently, the options activity is purely technical. This lack of fundamentals means the stock’s direction will hinge on order flow dynamics and institutional positioning. The heavy call open interest at $370 suggests a potential "gamma squeeze" scenario if the stock approaches that level, as market makers hedge their short-dated call exposure. However, the long-term 200D MA at $407.28 remains a formidable hurdle, indicating this could be a short-term trade rather than a sustained breakout.

Actionable Trade Setups for Traders

For options traders, the $370 call (UNH240419C00370000) expiring Friday offers a high-conviction play. With 5,329 contracts open, this strike represents a liquidity hotspot. Entry near $349.97 (intraday high) with a target at $370 (strike price) and a stop below $341.30 (intraday low) balances risk and reward. For next Friday, the $400 call (UNH240426C00400000) (OI: 4,162) could benefit from a continuation rally.

Stock traders should consider entries near $341.30 (intraday low) if support holds, with initial targets at $349.97 and then $368.83 (Bollinger Upper Band). A breakdown below $341.30 would invalidate the bullish case, exposing the 30D support at $302.70. Use tight stops just below key levels to manage risk.

Volatility on the Horizon: Positioning for a Gamma-Driven Move

The convergence of heavy call open interest at $370 and UNH’s proximity to its 30D MA ($322.36) creates a high-stakes scenario. If the stock gaps higher on Friday, the $370 calls could see explosive gains as market makers scramble to hedge. However, the 200D MA at $407.28 remains a critical long-term resistance, suggesting this is a short-term trade. Traders should monitor the 30D support ($302.70–$304.34) as a floor—failure to hold here would signal a shift in sentiment. With options expiration looming, volatility is set to spike, offering both opportunity and risk for those positioned correctly.