Two of the S&P 500’s Biggest Losers Show Daily MVB Buy Signals

By Lawrence G. McMillan

Two of the hardest-hit stocks in the S&P 500 this year — UnitedHealth Group ($UNH) and UPS ($UPS) — both issued daily MVB buy signals today. While this is a notable technical development, it’s worth viewing these signals within the context of each stock’s broader downtrend.

UnitedHealth Group ($UNH)

$UNH triggered its first daily MVB buy since the sharp selloff that began in April (see image above). On the weekly chart (below), the stock has now traded above the -3σ (sigma) band — an early step toward a possible weekly buy signal. For that to occur, $UNH would need to close above the band at the end of the week and continue higher the following week. Despite today’s signal, the stock remains in a strong long-term downtrend, so follow-through will be key.

UPS ($UPS)

UPS also flashed a daily MVB buy today (Image 1 below). However, past daily buys during this extended downtrend have not produced lasting rallies. This time, though, the signal comes as the stock is testing long-term support near its 2020 lows (Image 2 below). Whether that support holds could determine if this buy signal gains traction or fades like previous ones.

Takeaway

Seeing daily MVB buy signals in two of the year’s biggest laggards is intriguing — especially when both are trading near major technical inflection points. But with each still locked in long-term downtrends, these setups will require confirmation before they can be viewed as more than short-term opportunities.

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