UnitedHealth's RSI Suggests It Is Extremely Oversold

Core Viewpoint - UnitedHealth Group's stock has experienced significant volatility, with a recent drop of 30% following a 45% rally, leading to a 12-month price forecast of $629.32, indicating a potential upside of 35.17% based on analyst ratings [1][2][6]. Stock Performance - The stock gapped down more than 12% in one day due to a new investigation by the Department of Justice into its Medicare Advantage business, which raised concerns about questionable diagnoses for larger government payments [2][3]. - Despite the drop, UnitedHealth rebounded 7% by the end of the trading session, suggesting that buyers are entering the market [3][11]. Earnings and Guidance - UnitedHealth's January earnings report showed an earnings beat, although revenue slightly missed expectations, breaking a streak of several quarters of positive results [4]. - Management provided strong forward guidance, indicating confidence in sustained growth throughout the year, despite the recent stock selloff [5]. Analyst Sentiment - Analysts remain bullish on UnitedHealth, with firms like Wells Fargo, Barclays, KeyCorp, and Cantor Fitzgerald maintaining Buy ratings and price targets between$ 650 and $700, suggesting over 50% upside from recent lows [6][7]. - The stock's current trading level below$ 470 presents an attractive entry point for investors, given the valuation disconnect with mega-cap stocks [7]. Market Conditions - The stock is technically oversold, with an RSI of 27, which typically leads to sharp rebounds in fundamentally strong stocks [11]. - The massive selloff has created a compelling trade setup, with analysts seeing significant upside potential and strong fundamental momentum [13].