UNH

An important observation on this short.

One day reversal

Earnings were a beat which created a huge spike that was completely reversed the same day. At the top (including our example of a local top), that usually indicates a change of trend. Needless to say, the volume here checks out.

I will be looking to sell short if the neckline breaks below with a set timer on that event. Ideally on good volume.

The borrow rate on UNH is extremely low at 0.40% so it only makes sense to short shares, rather than trying to time the drop with options. Although 67.6% of significant moves land in a single 30-minute window historically with a median daily range of 1.9% (9 points). We just don't know when that will happen.

My stop loss will sit at 15 points above the neckline and I will be looking to close the position manually if the daily price closes anywhere back above the neckline and below my stop.

Let's watch.