During the recent trading sessions stock of UnitedHealth Group Incorporated (NYSE:UNH) was gathering the crowd in the stock market. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.
How has the stock performed recently?
UnitedHealth Group Incorporated (NYSE:UNH) in the last month has increased +2.04%. Shares are now up +47.90% over the past year, outperforming the broad market by 176.4% and underperformed a peer group of similar companies by -1%. After the latest session, which saw the stock close at a price of $197.73, UNH sits -1.51% below its 52-week high. UnitedHealth Group Incorporated (NYSE:UNH) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that UNH may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for UNH is 58.73%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 71.94%, tells a different story, and suggests that UNH currently trades in overbought territory.
What do the trading volumes reveal?
Volume patterns can also be useful for predicting future performance. When trading activity is abnormally high, it’s often a sign that the market feels particularly strong in one way or another about the future direction of a stock. UnitedHealth Group Incorporated (UNH) average trading volume of 2,309,280 during the past month is 27.95% below its average volume over the past year, indicating that investors have been less active than usual in the stock in recent times.
What do the analysts think?
UNH is currently undervalued by -6.09% relative to the average 1-year price target of $210.56 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 1.60, which implies that analysts are generally bullish in their outlook for UNH over the next year.
How risky is the stock?
Absolute price performance isn’t the only thing analysts consider when predicting future performance: volatility matters as well. Beta, which measures the stock’s volatility relative to the overall market, is a simple but effective metric for assessing risk.
UnitedHealth Group Incorporated (NYSE:UNH) has a beta of 0.65, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. UNH therefore has a below average level of market risk. During the past couple of weeks, UNH average daily volatility was 10.38%, which is 1.2 percentage points lower than the average volatility over the past 100 days.