As UnitedHealth Group (UNH) prepares to deliver its latest quarterly results, a signal from Berkshire Hathaway is impossible to ignore. In the first quarter, Greg Abel — the man Warren Buffett handpicked as his successor — liquidated the entire stake of more than 5 million shares, completely unwinding a position that Buffett himself initiated in the second quarter of last year. The move lands just as UnitedHealth’s stock has surged 66% year-to-date, hitting an intraday high of $434 last week, while a series of bearish technical patterns flash caution.
Investors are now asking whether the stock is a waystation in a continuing recovery, or an impending top.
Multiple technical signals suggest the rally is losing steam. On the daily chart, the uptrend of recent months has visibly flattened, forming a well-defined rising wedge with two ascending, converging trendlines now approaching their apex. Such a formation often resolves with a downside breakout. Meanwhile, both the Relative Strength Index and the Percentage Price Oscillator are tracing out bearish divergences against price: the stock has kept climbing, but the momentum gauges are tilting lower, with the RSI slipping toward the neutral 50 zone and the PPO on the verge of crossing below its zero line.
The most probable path, therefore, is a bearish breakdown after earnings. Key technical support sits at the $400 level, and only a decisive push above the psychologically important $450 mark would invalidate this bearish scenario.
When Buffett first bought UnitedHealth in the second quarter of last year, the valuation had just suffered a sharp compression. The nation’s largest health insurer was grappling with elevated medical utilization and cost pressures, but it had already begun adjusting its plan offerings, reshaping pricing, and investing in artificial intelligence to drive efficiency — all while the stock sat in a trough. The company’s commanding moat, built on the twin pillars of UnitedHealthcare and Optum, was almost certainly the draw.
Abel’s decision to exit at the start of this year is not necessarily a verdict on the business. Based on the approximate timing of the buy and the sell, the position likely delivered a return in excess of 20% for Berkshire Hathaway, suggesting the sale may simply reflect portfolio management or profit-taking.
The debate now centers squarely on valuation. UnitedHealth trades at 23 times forward earnings — higher than when Buffett established the stake, yet still below certain periods in the past. With revenue growth regaining momentum, the multiple hardly qualifies as extreme. The Street expects the current quarter’s revenue to ease modestly, by 71 basis points, to $110 billion, putting full-year revenue on track for $444.1 billion. A recent decision to lift Medicare Advantage rates by more than 2% has added over $13 billion in incremental benefits, providing an additional tailwind.
Analyst opinions, however, are sharply divided. HSBC assigns a target as low as $380, while RBC and Morgan Stanley see the stock reaching above $460. At $424, UnitedHealth currently trades just above the consensus target of $417.
The decisive exit by Berkshire’s new chief and the cluster of amber-lit technical indicators turn the upcoming earnings release into a critical test. The long-term recovery narrative is far from broken, but the short-term risk-reward calculus has grown considerably more delicate. For investors, the question may be less about whether to simply buy or sell, and more about whether they are willing, on the eve of yet another directional break, to wager that an operational turnaround can outweigh the weight of technical pressure.
