Key Takeaways
- UnitedHealth shares dropped nearly 5% Thursday after the health insurance giant confirmed that it’s the subject of a Department of Justice investigation.
- After briefly consolidating in June, UnitedHealth shares have resumed their strong downtrend on increasing volume this month, a move that has coincided with the 50-week moving average crossing below the 200-day moving average to form an ominous “death cross.”
- Investors should watch key support levels on UnitedHealth's weekly chart around $250 and $215, while also monitoring overhead areas near $325 and $368.
UnitedHealth Group (UNH) shares tumbled Thursday after the health insurance giant confirmed that it’s the subject of a Department of Justice investigation.
The company said it’s complying with formal criminal and civil requests from the DOJ, a development that follows months of reports that the agency is investigating UnitedHealth's billing practices in its Medicare Advantage program.
Since setting their April high, UnitedHealth shares have lost more than half their value, with reports of federal scrutiny compounded by a downgraded profit forecast earlier this year and the departure of the company’s CEO. Looking ahead, investors will be watching for updates on the DOJ probe and the company's financial performance when UnitedHealth reports earnings before the market opens next Tuesday.
UnitedHealth shares fell nearly 5% on Thursday to $278.58, their lowest closing level since mid-May. The stock is the weakest performer in the Dow Jones Industrial Average in 2025.
Below, we take a closer look at UnitedHealth’s weekly chart and point out price levels that investors will likely be watching.
Downtrend Resumes After Brief Consolidation
After briefly consolidating in June, UnitedHealth shares have resumed their strong downtrend on increasing volume this month, a move that has coincided with the 50-week moving average (MA) crossing below the 200-day MA to form an ominous “death cross.”
While the relative strength index confirms bearish price momentum, it also flashes oversold conditions, potentially attracting bargain hunting in the stock.
Let’s locate two key support levels to watch on UnitedHealth’s chart if the shares keep trending lower and also identify overhead areas worth monitoring during future recovery efforts in the stock.
Key Support Levels to Watch
The first lower level to watch sits around $250. This area may provide support near the May sell-off low, which closely aligns with a range of corresponding price action on the chart stretching back to early 2018.
Selling below this key level opens the door for a retest of lower support near $215. Investors could look for long-term buying opportunities in this location close to a horizontal line that links a series of troughs on the chart from November 2017 to September 2019.
Overhead Areas Worth Monitoring
During recovery efforts in the stock, investors should initially monitor the $325 area. The price may encounter selling pressure in this region near last month’s high, which lines up with a pullback to the 50-week MA in February 2021.
Finally, a successful breakout above this area could fuel a move toward $368. Those who have accumulated UnitedHealth shares at lower levels may see this as a suitable location to lock in profits near the November 2020 and January 2021 peaks during an extended uptrend in the stock.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.
