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| 2/23/99 United Healthcare (UNH)
Points to watch: UNH has been stuck in a
trading range between 42.5 and 49.63 since mid October. The stock is once again
making a run at the upper end of the range after failing to break through resistance on
three previous tries from mid November-early December. The stock is likely to break
above resistance this time around. When a stock touches resistance three times and
then hits it again a 4th time it is likely to break through the resistance point on the
4th try because all of the weak players (sellers) have been knocked out of the game and
only strong hands are holding the shares on the 4th time around. It is thus easier
to push the stock up through the resistance point. Other indicators are also
positive for an upside breakout. On Monday UNH touched its 200 day moving average
(49.13) for the first time since gapping beneath it in late July. The MACD signal
line is in buy territory and moving average momentum is rising. Buy on a break above
the 49.63 resistance level.
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