UnitedHealth is the IBD Stock of the Day. UNH stock retook a key level of technical support as it sets up in a base.
Shares of the U.S. health-insurance giant have held up, with managed care providers in general mounting a three-day rally, as investors try to play defense against a stock market upended by rising prices and recession risks.
UNH Stock
Shares of UnitedHealth closed up 2.1% to 499.81 in the stock market today. The stock has formed a double-bottom base with a 507.35 buy point. Shares closed above their 50-day moving average on Thursday, their first finish above that key level of investor support since April.
The relative strength line for UNH stock is at a new high, showing strong outperformance against the S&P 500. Shares have a 94 Composite Rating from IBD.
UnitedHealth holds an EPS Rating of 89, and its earnings outlook remains solid. Analysts expect the company's earnings per share to grow 14% this year and 14% next year.
Among other health care stocks, Centene is showing similar chart action.
Like UNH stock, Centene is in a double-bottom base. The buy point on that base is 87.44. Shares ended up 2.2% to 83.64 on Thursday, and were holding support above their 50-day line.
Cigna, up 1.5%, was also fighting to hold its 50-day line. Humana, up 1.5%, was standing firm on support at its 50-day line. Humana's relative strength line was also at a new high, as indicated by the blue dot on MarketSmith.
UnitedHealth, in April, reported first-quarter earnings that beat expectations. The company also raised its full-year profit outlook.
Prices are rising for things like groceries and gasoline. But UnitedHealth, unlike manufacturers, is relatively insulated from those costs, an IBD article in March noted. Rising interest rates have pushed profits higher, benefiting UNH stock.
UnitedHealth, via its Optum division, is also hoping to gain on a shift toward paying health care providers for better health outcomes, rather than the services provided.
