UnitedHealth Group Incorporated (UNH) is a diversified health care insurance company and a component of the Dow Jones Industrial Average. The stock had strong upward momentum since the end of 2010, as the health insurer was an original beneficiary of the Affordable Care Act. The stock continued its momentum run-up despite the company leaving the HealthCare.gov exchanges, setting its all-time intraday high of $287.94 on Dec. 4. However, this day provided a warning as a negative daily "key reversal," as the Dec. 4 close was well below the Dec. 3 low.

UnitedHealth shares ended last week at $247.67, down just 0.6% so far in 2019. The stock is in correction territory at 14% below its all-time high but is up 6.8% from its Dec. 26 low of $231.81. The stock has an elevated P/E ratio of 20.33 and a dividend yield of 1.49%, according to Macrotrends.

UnitedHealth stock lags the Dow 30 so far in 2019. The average closed Friday at 23,995.95, up 2.9% year to date and in correction territory at 11% below its all-time intraday high of 26,951.81 set on Oct. 3. The Dow traded as low as 21,712.53 on Dec. 26 and is up 10.5% since then.

Analysts expect UnitedHealth to report earnings per share (EPS) between $3.22 and $3.31 before the opening bell on Tuesday, Jan. 15. The company has beaten EPS estimates 20 quarters in a row. Most expect UnitedHealth to report a solid revenue gain on membership growth. This growth is helped by the rise in Medicaid and Medicare Advantage enrollments. A potential drag is a $2.6 billion payment to the U.S. Treasury for customers' portion of 2018 health insurance taxes.

The daily chart for UnitedHealth

Daily technical chart showing the share price performance of UnitedHealth Group Incorporated (UNH)
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UnitedHealth has been above a "golden cross" since March 29, 2016, when the stock closed at $129.83. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. This bullish signal was in play when the stock set its all-time high of $287.94 on Dec. 4. The 50-day simple moving average is declining toward the 200-day SMA at $260.22 and $253.99, respectively. A negative reaction to earnings could result in a "death cross" formation later in the first quarter.

The horizontal lines below these averages are my annual and weekly value levels at $247.82 and $239.27, respectively. Above are three horizontal lines that are my semiannual, monthly and quarterly risky levels at $274.54, $278.16 and $282.04, respectively.

Note that the day the stock posted its high at $287.94 on Dec. 4 was a negative daily "key reversal" day, with the close that day below the Dec. 3 low. In addition, the day of the Dec. 26 low of $231.81 was a positive "key reversal" day, with the close that day above the Dec. 25 high.

The weekly chart for UnitedHealth

Weekly technical chart showing the share price performance of UnitedHealth Group Incorporated (UNH)
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The weekly chart for UnitedHealth is negative, with the stock below its five-week modified moving average of $257.65 and well above its 200-week simple moving average, or "reversion to the mean," at $176.27. The last time the stock tested its "reversion to the mean" was during the week of Nov. 26, 2010, when the average was just $35.80. The 12 x 3 x 3 weekly slow stochastic reading ended last week at 27.93, down from 30.58 on Jan. 4. The stock needs a weekly close above its five-week modified moving average with a rising weekly slow stochastic reading.

Given these charts and analysis, traders should buy UnitedHealth shares on weakness to my annual and weekly value levels of $247.82 and $239.27, respectively, and reduce holdings on strength to my semiannual, monthly and quarterly risky levels of $274.54, $278.16 and $282.04, respectively.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.