UnitedHealth Group (UNH) Options Signal Bullish Momentum: Call Dominance at $370 Strike Points to Potential Breakout Opportunity

• UnitedHealth Group (UNH) trades at $345.39, down 0.05% intraday, with a short-term bullish trend and long-term ranging pattern.
• Options data reveals a 0.49 put/call open interest ratio, with heavy call OI at $370 (5,329 contracts) and $350 (5,091) for Friday expiration.
• RSI at 67.5 suggests overbought conditions, while Bollinger Bands indicate a potential test of the $368.83 upper band.

The options market and technicals align on a compelling narrative: upside potential is favored, but with caution around overbought momentum. The call-heavy open interest at key strikes and recent earnings revisions suggest a breakout scenario is being priced in, though the 200D MA at $407.28 remains a critical psychological hurdle.

Bullish Sentiment Embedded in Options Structure

The OTM call options with the highest open interest—particularly the $370 (5,329 OI) and $350 (5,091 OI) strikes for Friday expiration—signal strong conviction in a near-term rally. These strikes cluster around the 200D MA and Bollinger Band upper boundary, suggesting institutional players are hedging or positioning for a breakout. Conversely, put open interest is concentrated at $300 (2,437 OI) and $340 (2,411 OI), indicating limited downside protection demand. The 0.49 put/call ratio (calls: 1,176,818; puts: 575,905) reinforces bullish bias, though the histogram’s negative divergence in MACD (13.07 vs. 13.68 signal line) hints at potential near-term exhaustion.

Block trading activity is absent, but the heavy call OI at $370 suggests a "whale" trade could materialize if the stock closes above this level. Traders should monitor the $349.97 intraday high as a critical trigger point for call buyers to activate.

News Flow Amplifies Bullish Case

UnitedHealth’s recent announcements—dividend hikes, leadership restructuring, and full-year guidance upgrades—cement its appeal to income and growth investors. The $2.10/share dividend (yield ~2.4%) attracts long-term holders, while strategic moves like Optum Rx’s payment model modernization and Medicaid contract renewals in Florida and Kansas underscore operational resilience. These developments align with the options market’s bullish tilt, as investors price in earnings growth and margin expansion.

However, the stock’s 200D MA at $407.28 remains a formidable barrier. A sustained close above this level could validate the breakout thesis, but failure to clear it may trigger profit-taking and a pullback toward the 30D support at $302.70.

Actionable Trade Setups

1. Options Play: Buy the $370 call (UNH250718C00370000) for Friday expiration if UNH closes above $349.97. This strike offers 15% upside potential if the stock breaks the 200D MA. For a longer-term play, the $400 call (UNH250725C00400000) next Friday could capitalize on a sustained rally, though it requires a 16% move to breakeven.

1. Stock Play: Enter a long position near $341.30 (intraday low) with a target at $368.83 (upper Bollinger Band). A stop-loss below $333.14 (middle Bollinger Band) would limit risk if the bullish case fails. Alternatively, consider a bullish iron condor by shorting the $330–$360 put spread and $380–$410 call spread to capture premium while capping risk.

Volatility on the Horizon

The convergence of technical indicators, options positioning, and corporate actions points to a high-probability breakout scenario. However, the RSI’s overbought reading and MACD’s bearish crossover suggest volatility may spike before a directional move. Traders should prioritize liquidity in the $350–$370 range and watch for a volume surge on a break above $349.97. If UNH fails to clear the 200D MA, the 30D support at $302.70 could become a battleground for bears. For now, the data favors a bullish bias, but patience and tight risk management will be key in this high-stakes setup.