What's more, the security's short-term options are a bargain
UnitedHealth Group Inc (NYSE:UNH) stock is near the top of the Dow today, last seen 0.7% higher at $244.47, as traders digest a long-term partnership with Quest Diagnostics (DGX). What's more, UNH shares could once again lead blue chips during the holiday-shortened week, if recent history is any indicator, and the insurance concern's short-term options are attractively priced, to boot.
UnitedHealth stock has rallied roughly 17% since its early February lows. The shares gapped higher in mid-April thanks to the company's stellar earnings report, and earlier this week peaked at $249.17 -- within a chip-shot of their late-January record high of $250.79.
As alluded to earlier, UNH stock could extend its upward momentum after Memorial Day, if past is prologue. The equity has been the best Dow stock to own during the holiday-shortened week, looking back 10 years. Specifically, UNH has averaged a weekly gain of 0.89%, and has ended the week higher 80% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.
Despite the security's recent uptrend, UnitedHealth Group's short-term options are a bargain. The stock's Schaeffer's Volatility Index (SVI) of 17% is in just the 17th percentile of its annual range, implying that near-term options are pricing in relatively low volatility expectations.
Since 2008, there have been just five other times at which UNH stock was trading near annual-high territory while simultaneously sporting an SVI in the bottom 20% of its annual range. One month later, the blue chip was higher each time, averaging a gain of 3.06%.