Wednesday, October 28, 2009

UNH - A Health Care Play

Trying to figure out the future of health care in the U.S. is beyond me. I am not keen to the idea of politicians trying to fix anything, regardless of party affiliation. Hopefully, something good will come out of the proposals now on the table.

Meanwhile, many of the insurers, pharmas and health care facilities have been beaten down for the past two years. There is a chance that in the future their recovery will materialize.

Unitedhealth Group (UNH) is showing signs of life. UNH provides health care services in the United States.

Positives are:

•Fair chart pattern.
•Support at the 23.50 level.
•Average daily volume of over 12.5 million shares.
•Healthy fund ownership.
•Forward P/E ratio is at about 8.

Trading this morning at 26.11, I expect UNH to bounce up and cross the 50 dma (now at 27) in the next few weeks, if so, the next resistance level would be at 30.

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