UnitedHealth (UNH) - technical analysis - UnitedHealth Group (NYSE:UNH)

Shares of UnitedHealth Group Incorporated UNH are getting crushed Tuesday.

The Minnetonka, Minnesota-based company announced that CEO Andrew Witty would step down for personal reasons.

Stephen Hemsley will be the new chief executive. UnitedHealth also suspended its guidance for 2025.

The shares have dropped 35% in just one month. But the move lower may soon end. This is why it is our Stock of the Day.

Investor and trader psychology makes some prices more important than others in the financial markets. A big part of this is that people experience remorse, which can affect trading decisions.

For example, sometimes when a stock falls to a level that had previously been support, there is a good chance it finds support at it again. This occurs due to seller remorse.

Some of the people who sold at the support regret doing so when the price rallies after. Other investors decided that if they eventually could, they would buy their shares back for the same price they were sold for.

So, if and when the stock returns to the support level, they place buy orders. If there are enough of them, it will create support at the level again.

This can be seen on the chart of UnitedHealth. See below. The $435 level was support multiple times over the past three years.

Seller remorse can also convert what had been a resistance level into a support level.

Some of the people who sell when a stock is at resistance regret doing so if the resistance breaks and the price moves higher. Some vow to buy their shares back. But they will only do so if they can get them for the same price they were sold at

As a result, if the stock sells off and returns to the level, these remorseful sellers place buy orders. If there are enough of them, support can form at the price.

The $340 level was resistance for UNH in November 2020 and January 2021. There's a chance there is support around this price and there may finally be a floor under the shares.

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