UnitedHealth Group Has A Reversal (UNH)

| About: UnitedHealth Group (UNH)

Nick Perry (Schaeffer's Investment Research) submits: There has been some buzz recently about UnitedHealth Group (NYSE:UNH). I have been keeping an eye on the stock after this article in yesterday's Wall Street Journal - "UnitedHealth Option Grants Raise Questions" [subscription required].

If you haven't been watching the stock today, it gapped higher this morning after earnings, but quickly reversed into negative territory. It is currently down around two percent.

A reader asks if "low margins" are the reason for the drop and I don't know if that is the reason or not. What I do know is that the stock is heavily favored by the Street. According to Zacks, 13 of 16 (81 percent) analysts rank the stock with a "buy" rating.

This stock had been a strong performer since early-2000, but has moved steadily lower since peaking in December. Today's drop is pushing the stock into an oversold condition, but the stock has been bouncing in and out of oversold territory for the last few months.

While the oversold condition is something to note, I think that the bigger picture issue to keep in mind is the overwhelming enthusiasm from the Street. Given that the market, and nearly every sector I track, is higher today, it is a curious that this stock couldn't hold its opening gap.