DailyPlay – UnitedHealth Group (UNH) – April 8, 2022

View UNH Trade

UNH Bullish Opening Trade Signal

Strategy Details

Strategy: Call Debit Spread

Strategy Direction: Bullish

Details: Buy May 20, 2022 $540/$570 Call Vertical @ $12.13 Debit

Trend Continuation Signal: This is a bullish strategy on a stock or ETF that is experiencing a bullish trend. 

1M/6M Trends: Bullish/Bullish

Technical Score: 10/10

OptionsPlay Score: 87

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that if there is a multi-leg option strategy, it should be entered as a single trade.

Investment Rationale

UNH has broken out to new all-time highs, finding support on Monday this week right at its bearish Propulsion Momentum level and then shooting higher. We expect this to carry higher over coming weeks to target the $570 level, where both daily and weekly charts show Propulsion Full Exhaustion targets. (Please note that the company reports quarterly earnings next week (4/14 before the open) so realize there is increased risk and volatility expected around that report.) So, we’ll buy the May 20th $540 call and sell the $570 against it for a $12.12 debit. (Given the high cost to each spread, consider doing two of them in order to allow some exit strategy that isn’t all or nothing. We’re laying out about 40% of the strike differential, which is a bit higher than I normally like. However, the options are a bit high-priced because of the upcoming earnings report.