PreMarket Prep Stock Of The Day: UnitedHealth Group

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don't have the time to tune in live or listen to the podcast, Benzinga will highlight one stock that merits further discussion. This analysis is not a buy or sell recommendation.

Fundamentals are playing a role in Wednesday's price action: there is no better fundamental information to evaluate an issue than its most recent earnings report. With its first-quarter beat, UnitedHealth Group Inc UNH is trading higher in a bad tape, making it the PreMarket Prep Stock Of The Day.

UnitedHealth's Q1 Beat

Before the open, the health insurer reported an 8-cent first-quarter EPS beat, along with a slight sales beat.

UnitedHealth did not provide any forward guidance. With the COVID-19 pandemic putting an enormous strain on our health care system as well as the entire economy, and the outcome still unknown, it doubtful that many companies will be providing forward guidance.

UnitedHealth's Price Action: From February High To March Low

Being one of the top components in the S&P 500, the issue was perched at its all-time-high at $306.72 on Feb. 19. UnitedHealth made its all-time-closing high on that same day at $305.31. It gave investors plenty of time to sell it over $300.

The issue made seven consecutive daily highs between $302.51 and $306.72 from Feb. 12 through Feb. 21.

When the index went to its sell-all mentality, UnitedHealth shares suffered too. Just as the index bottomed on March 23, so did the shares of the issue at $187.72. That low coincides with its October 2017 low of $186.

UnitedHealth Along For The Ride On The Rally — And Then Some

While the index took some time to recover half of its losses from the February swoon, UnitedHealth accomplished that feat in only three days when it surpassed $247, reaching $257.96 on March 26. After a five-day retreat to $226.03, the issue was off to the races once again. On Tuesday, UnitedHealth reached its post-recovery high of $273.07 and ended the session at $270.50.

UnitedHealth's Great Day In A Bad Tape

Wednesday's rally is especially impressive considering the broad market is down and UnitedHealth is in the green by by 3.43% as of the time of publication. 

After a much higher open, it peaked at around 10 a.m. at $281.66 and reversed course. The ensuing decline took the issue to just above Tuesday's close ($270.50) before roaring back to a new high of $282.99 as of 1 p.m.

The stock was trading at $279.77 at the time of publication. 

UnitedHealth Moving Forward

UnitedHealth has a few areas of resistance, such as the pair of highs at the $285 area from March 6 ($284.97) and March 11 ($285.24). If the market continues its upward projectile, those multiple highs over $300 are not too far away.

For investors who are attempting to lock in or protect gains in the issue, a breach of Wednesday's low ($270.68), which matches Tuesday's close ($270.50), may signal more downside in what has been amazing rally. 

Photo courtesy of UnitedHealth Group.