|After putting in a double bottom in November 2008, shares of UnitedHealth Group (UNH) have moved up sharply. While caution is warranted, there are a number of positives that indicate a further price advance is likely.|
|First, UNH put in a double-bottom formation. Second, it broke out of a long-term downward-sloping trendline (blue line). Third, there is a positive relative strength index (RSI) divergence on the stock. RSI is sloping up and has made new highs as compared to the stock's October highs, as shown in green in the RSI pane.|
|FIGURE 1: UNH, DAILY. UNH recently broke above the blue downward trendline.|
|Graphic provided by: Wealth-lab.|
|On the downside, UNH has now hit right up against a minor Fibonacci resistance level at 23%. Assuming UNH can move higher past this level, $31.50 would be the first target.|
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