Price Forecast:

Bullish Case: UnitedHealth's strategic acquisitions and expected market growth driven by aging demographics position it for substantial gains, bolstered by an optimistic earnings outlook and recovery from recent volatility.

Bearish Case: Ongoing legal challenges, rising operational costs, and negative media sentiment surrounding recent events present significant risks that could pressure UNH's share price in the near term.

Potential Outcomes:

• Increased membership from Medicare Advantage (60% likelihood)
• Ongoing legal issues may hinder growth (40% likelihood)
• Market reactions to CEO's death create volatility (50% likelihood)
• Strategic decisions enhance profitability (70% likelihood)
• Regulatory changes negatively impact revenues (40% likelihood)

Trading Oracle: Consider initiating a bullish call spread using UNH 01/17/2025 $500/$510 calls. This capitalizes on expected stabilization post-volatility with an 80% probability of profit, leveraging favorable implied volatilities around 34.9% and skew towards bullish sentiment in the market.

December 17, 2024