UnitedHealth Group Soars 12.65%—What’s Driving This Record-Breaking Rally?

Summary
• Warren Buffett’s Berkshire Hathaway disclosed a $1.6B stake in UnitedHealth Group (UNH) via SEC filings
• UNH surges 12.66% to $305.85, marking its largest intraday gain since 2008
• Sector leader Elevance Health (ELV) rises 4.88% as health-care stocks rally

UnitedHealth Group’s stock has erupted in premarket trading, surging over 12% after Warren Buffett’s Berkshire Hathaway revealed a massive $1.6 billion stake in the beleaguered insurer. The move has ignited a frenzy in the health-care sector, with shares trading at their highest level since early 2025 amid a wave of institutional confidence. With the stock trading between $294.71 and $310.30, the question now is whether this rally is a short-term bounce or a turning point for a company mired in regulatory and operational turmoil.

Warren Buffett’s $1.6B Bet Ignites Investor Confidence
The explosive move in UnitedHealth Group’s stock was catalyzed by Berkshire Hathaway’s disclosure of a 5 million-share stake in the health insurer, valued at $1.57 billion. This revelation, coupled with similar investments by Michael Burry and David Tepper, has been interpreted as a strong endorsement of UNH’s long-term prospects despite its recent challenges. Deutsche Bank analyst George Hill highlighted that Berkshire’s involvement could establish a near-term floor for the stock, signaling to investors that the company’s struggles may be nearing a resolution. The filing also coincided with a broader market rotation into undervalued sectors, with health-care stocks gaining traction as Buffett’s legacy as a value investor continues to influence market sentiment.

Health Care Sector Rally Gains Momentum as Elevance Health Leads
The health-care sector has rallied in tandem with UNH’s surge, though Elevance Health (ELV) remains the sector leader with a 4.88% intraday gain. While UNH’s 12.66% jump outpaces ELV’s performance, the broader sector’s positive momentum suggests a shift in risk appetite. Analysts note that institutional investors are increasingly viewing health-care stocks as undervalued amid macroeconomic uncertainty, with UNH’s recent volatility creating a buying opportunity for long-term investors.

Options Playbook: Leveraging Volatility in a Post-Buffett UNH
• MACD: -9.51 (bullish crossover), Signal Line: -12.85, Histogram: 3.34 (positive divergence)
• RSI: 45.33 (oversold territory), Bollinger Bands: $230.41–$298.51 (price near upper band)
• 200D MA: $446.03 (far below current price), 30D MA: $276.28 (support level)

UnitedHealth Group’s technicals paint a mixed picture: short-term bullish momentum clashes with a long-term bearish trend. Key levels to watch include the 200D MA at $446.03 (a distant target) and the 30D MA at $276.28, which could act as a near-term support. The RSI at 45.33 suggests oversold conditions, but the MACD histogram’s positive divergence hints at potential for further upside. Given the stock’s volatility, options traders may find opportunities in high-leverage contracts with favorable risk-reward profiles.

Top Call Option: UNH20250822C300
• Code: UNH20250822C300, Type: Call, Strike: $300, Expiration: 2025-08-22
• IV: 42.36% (moderate), Leverage Ratio: 28.38% (high), Delta: 0.6299 (moderate), Theta: -0.6752 (high decay), Gamma: 0.0197 (responsive to price moves), Turnover: $18.3M (liquid)
• Payoff at 5% Upside (ST = $321.14): $21.14 per share. This contract offers aggressive leverage for a bullish continuation, with high gamma ensuring sensitivity to price swings.

Top Put Option: UNH20250822P300
• Code: UNH20250822P300, Type: Put, Strike: $300, Expiration: 2025-08-22
• IV: 43.24% (moderate), Leverage Ratio: 58.78% (high), Delta: -0.3715 (moderate), Theta: -0.2684 (low decay), Gamma: 0.0193 (responsive), Turnover: $7.17M (liquid)
• Payoff at 5% Upside (ST = $321.14): $0 (out of the money). This put offers downside protection with a high leverage ratio, ideal for hedging a long position in UNH.

Trading Outlook: Aggressive bulls may consider UNH20250822C300 into a break above $307.50, while cautious investors should monitor the 200D MA for long-term positioning.

Backtest UnitedHealth Group Stock Performance
The backtest of UNH's performance after a 13% intraday surge shows mixed results. While the stock experienced a positive surge, it failed to maintain this momentum over the short and medium term. The 3-day win rate was 52.40%, the 10-day win rate was 52.23%, and the 30-day win rate was 54.62%, indicating a higher probability of positive returns in the short term. However, the maximum return during the backtest period was only 0.02%, which suggests that while there was potential for gains, they were relatively modest.

Act Now: UNH’s Momentum Could Define Market Sentiment
UnitedHealth Group’s 12.66% surge has injected urgency into the health-care sector, with institutional backing from Buffett and Burry signaling a potential inflection point. While the stock’s long-term fundamentals remain clouded by regulatory risks and operational challenges, the immediate technical setup favors continuation of the rally. Investors should closely monitor the 200D MA at $446.03 as a gauge of broader market conviction. For now, the sector leader Elevance Health (ELV) rising 4.88% underscores the sector’s resilience. Watch for $307.50 breakout or regulatory updates—either could dictate the next phase of this volatile trade.