UnitedHealth Slumps 3.1%—What's Behind the Sell-Off?

• UNH plunges to $291.14 (-3.14%) after hitting a session high of $300.68
• DOJ probes and $3.3B 'stealth sales' scrutiny trigger investor exodus
• CEO succession turmoil and Medicare billing investigations fuel doubt
• 52-week range now spans $248.88–$630.73 as technicals turn bearish

UnitedHealth faces a critical reckoning as traders punish its stock amid revelations of aggressive accounting tactics and regulatory crossfires. The sell-off deepens concerns over its ability to sustain profit growth without controversial asset flips, while sector peers lag in sympathy.

Accounting Scrutiny & Regulatory Overhang Spark Exodus
The rout traces directly to damning disclosures about UnitedHealth’s 2024 earnings engineering. By selling non-core assets to private equity firms like Warburg Pincus and KKR—while retaining repurchase options—the company booked $3.3B in one-time gains to preserve its 60-quarter earnings streak. Critics argue this masks deteriorating core operations, with Medicare Advantage margins collapsing to 1% amid soaring costs. The DOJ’s criminal investigation into billing practices and CEO Andrew Witty’s abrupt exit amplify distrust, eroding confidence in its long-term viability.

Bearish Technicals & Opportunistic Put Plays Dominate
RSS Technicals:
• 200-day MA: $481.93 (bearish divergence)
• Bollinger Bands: $294.58–$318.62 (current price below middle)
• RSI: 49.94 (neutral, dipping from overbought)
• MACD: -5.73 vs Signal -6.96 (bullish histogram expansion)

Short-term traders should focus on $290 support and $295 resistance. The Health Care Select Sector SPDR (XLV) mirrors UNH’s decline (-1.72%), but avoid leveraged ETFs given lackluster volume. Two standout options:

UNH20250725P295 (Put): Strike $295, expires 7/25
- Implied Vol: 32.9% | Leverage: 35.75%
- Delta: -0.555 | Gamma: 0.0237 | Theta: -0.0303
- Why Buy: Near-the-money liquidity ($806.7K turnover) with theta decay advantages.
- Payoff @ $276.58: $18.42 intrinsic value vs strike

UNH20250725P297.5 (Put): Strike $297.50, expires 7/25
- Implied Vol: 36.1% | Leverage: 28.33%
- Delta: -0.600 | Gamma: 0.0211 | Theta: -0.0240
- Why Buy: High gamma sensitivity amplifies gains on further declines.
- Payoff @ $276.58: $20.92 intrinsic value vs strike

Action Alert: Aggressive bears should stack P295/P297.5 spreads as UNH tests $290 support. Avoid calls until RSI confirms oversold (<30).

Backtest UnitedHealth Group Stock Performance
The backtest of UnitedHealth Group (UNH) after an intraday plunge of at least -3% shows favorable short-to-medium-term performance. The 3-day win rate is 53.18%, the 10-day win rate is 52.67%, and the 30-day win rate is 52.32%. While the returns are modest, with a maximum return of 0.14% over 30 days, the consistency of positive outcomes suggests UNH is a resilient investment following significant market volatility.

Sell-Side Momentum Dominates—Watch for $290 Break
UnitedHealth’s technical breakdown and accounting transparency concerns suggest the slide isn’t over. Investors must monitor $290 support—a breach could trigger stop-loss cascades toward $280. Meanwhile, sector leader Humana (HUM -2.34%) offers no refuge, proving managed-care skepticism is systemic. Traders should prioritize downside protection via puts until clarity emerges on Q3 guidance and DOJ resolution. Final Take: Short UNH20250725P295 if $290 fails—a $280 target implies 15% upside in puts.