UnitedHealth Stock Plunges 7.46% Amid Heavy Selling Pressure

UnitedHealth Group (UNH) concluded the latest session at $261.07, marking a significant 7.46% decline on elevated volume, underscoring intense selling pressure. The following technical analysis synthesizes key indicators to evaluate the stock’s trajectory.
Candlestick Theory
The most recent candle is a pronounced bearish marubozu, closing near its low ($260.55) after gapping down from the prior session, signaling strong downside conviction. This pattern emerged after repeated failures to reclaim the $290 resistance level – a zone tested four times in July 2025. Consecutive long wicks near $279-$286 previously indicated rejection of higher prices, reinforcing this resistance. Immediate support is evident at $260.55 (current low), with a critical psychological floor at $250. A sustained break below $260 may trigger accelerated selling, while recovery above $276 (Thursday’s low) could signal short-term stabilization.
Moving Average Theory
Price remains entrenched below all key moving averages – the 50-day (~$302), 100-day (~$338), and 200-day (~$395) – confirming a structural bearish bias. The 50-day SMA crossed below the 100-day and 200-day SMAs in mid-May, establishing a death cross that persists. Recent bounces have faltered near the descending 50-day SMA, most notably on July 17 and 23, demonstrating its role as dynamic resistance. The expanding distance between the 50-day and longer-term averages underscores robust downward momentum.
MACD & KDJ Indicators
MACD (12,26,9) resides deep in negative territory at -12.5, with the signal line maintaining a bearish crossover since late June. The histogram’s consistent negative expansion signals strengthening downside momentum. KDJ readings (14,3,3) are deeply oversold – K-line (5.2) and D-line (9.8) below 10 – yet failed to generate bullish crossovers during July’s minor rebounds, reflecting persistent weakness. Bearish continuations are likely until MACD shows convergence or KDJ sustains a crossover above 20.
Bollinger Bands
Price pierced the lower Bollinger Band ($271 ± 2.5%) dramatically on July 29, closing well outside the band amid a volatility surge (bandwidth expansion from 4% to 6.5%). Such an extreme deviation typically precedes mean-reversion bounces, but the absence of a reversal candle suggests ongoing capitulation. The July 24 breakdown triggered a band expansion phase after a prior contraction (bandwidth <3.5% in June), indicating renewed directional energy. A reclaim of the lower band ($268) is necessary to signal stabilization.
Volume-Price Relationship
Recent distribution phases exhibit higher volume on down days vs. up days – the July 29 sell-off registered 41.5M shares (highest volume since May’s crash), outpacing the July 24 decline (-4.76% on 22.6M shares). This distribution profile contrasts with May’s rebound, which saw expanding volume on rallies. The volume-weighted average price (VWAP) since June sits at $292, now acting as overhead supply. Low-volume bounces (July 25-28 averaged <16M shares) lack conviction, validating the bearish structure.
Relative Strength Index (RSI)
The 14-day RSI (23.1) resides in oversold territory, its lowest reading since mid-May. However, four consecutive RSI sub-30 readings in July have yet to catalyze a reversal, reflecting sustained momentum. Bearish divergence emerged in late June when price formed a lower high at $318 while RSI peaked at 52, foreshadowing weakness. While oversold, RSI alone is an insufficient reversal signal amid such pronounced momentum.
Fibonacci Retracement
Applying Fib levels between the July 1 peak ($326.14) and July 29 trough ($260.55): the 23.6% retracement ($276.04) aligns with the July 29 high, marking immediate resistance. Subsequent levels are 38.2% ($285.60) and 50% ($293.35). Notably, $285-$293 represents a confluence zone with the July 16-17 highs and the descending 50-day SMA. Any recovery will likely stall near these barriers without fundamental catalysts.
Confluence & Divergence Insights
Confluence is apparent: the $276-$285 resistance band ties Fib retracements, moving averages, and prior price structure. MACD, KDJ, and Bollinger Bands unanimously signal oversold momentum but lack reversal triggers. However, a critical divergence exists: RSI is testing May lows, yet price remains ~15% above May’s trough ($248), suggesting weakness may be less acute than in the previous capitulation. This hints at potential consolidation rather than fresh breakdowns if volume abates.
Probabilistic Outlook
The technical posture remains bearish, with momentum indicators favoring further downside or consolidation. A near-term bounce appears likely given extreme oversold readings and Bollinger deviation, though such rebounds may cap near $276 or $285 absent bullish volume confirmation. Sustained trade below $260 may initiate a test of the May low ($248). Investors should monitor for KDJ/MACD crossovers or volume-backed breaches above $276 to signal stabilization. Until then, rallies present tactical shorting opportunities.