A "Resistance Becomes Support" Example with UNH?

Dec 10

Looking at the weekly chart of UnitedHealth Group (UNH), here’s the resistance area I’ve marked in red:

1.April 11, 2022: $555 area rejected, and the stock sells off to $448.
2.August 15, 2022: $555 area rejected, and the stock sells off to $490.
3.October 31, 2022: Briefly touches $558, then sells off to $448.
4.November 27, 2023: $555 area rejected, and the stock sells off to $437.

In the week of July 15, 2024, the stock finally broke above this resistance level that had persisted for nearly three years. There are strong fundamentals behind this move. I’ve marked two instances where the stock has since come back down to this level (green 1&2), and am watching closely to see if it will continue to hold as support.

If it does, my first target is the $610 area.

Dec 11

Trade closed: stop reached

The area that acted as a long term resistance did not become support. Idea is invalidated and the trade is closed (15 points)

Dec 13

Note

Well, UNH was a good trade... until it wasn’t! I got stopped out the same day I entered:)
Here’s the thing—this was still a good trade setup. In fact, it was one of the best trades I’ve taken because it was scary to take, but the risk/reward made sense and there’s a lot to learn from it.
For those studying: support areas are all in our imagination. If enough people imagine the same thing and act on it, we might get the move we expect. If not, well—our stops get hit.
I hope you put in your stops at the same time you placed your trade. That’s the real key—managing risk and sticking to your plan, no matter how it turns out. On to the next trade! 📉➡️📈

Dec 13

Note

...next stop is $480 area.