UnitedHealth Group (UNH) shares will likely remain under the microscope on Monday after logging their worst daily decline since 1998 as the healthcare giant cut its full-year profit forecast.

The company, which cited higher-than-expected medical costs for the downward revision, has faced challenges in recent years from increasing demand for healthcare services under its government-assisted Medicare plans for aging adults and members with disabilities.

The downbeat outlook likely caught market watchers off-guard after the stock rallied toward its record high earlier this month on news the government would pay a higher rate to Medicare insurers than previously estimated.

UnitedHealth shares fell 22% to near $454 on Thursday, ahead of a day off from trading as U.S. markets were closed in commemoration of Good Friday. The stock is down 10% since the start of the year, in line with the S&P 500’s decline over the same period.

Below, we take a closer look at UnitedHealth’s weekly chart and use technical analysis to identify crucial price levels that investors may be tracking.

Decisive Close Below 200-Week Moving Average

A recent recovery in UnitedHealth shares toward their all-time high (ATH) ended abruptly last week, with the price staging a decisive close below the closely watched 200-week moving average. Importantly, the sell-off occurred on above-average volume, indicating conviction selling by larger market participants, such as institutional investors and hedge funds.

Moreover, the drop also thrust the relative strength index (RSI) below the 50 threshold, signaling accelerating selling momentum.

Let’s identify two crucial support levels on UnitedHealth’s chart where the shares could attract buying interest and also point out key overhead areas worth monitoring during potential upswings.

Crucial Support Levels to Watch

The first lower level to track sits around $439. The shares could encounter support in this location near the February swing low, which also closely aligns with last year’s April trough and a minor retracement in November 2021.

The bulls’ failure to defend this level could see the shares drop to lower support at $389. Investors would likely seek buying opportunities in this region near two troughs that formed on the chart during the stock’s strong uptrend in 2021.

Key Overhead Areas Worth Monitoring

During upswings in the stock, it’s worth monitoring the key $550 level. The shares may face considerable selling pressure in this area near several peaks on the chart stretching back to the prominent April 2022 swing high.

Finally, a rally above this region could see UnitedHealth shares retest higher levels around $606. This area on the chart would likely attract significant attention near the April high, which also lines up with a range of corresponding price action positioned just below the stock’s record high.

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As of the date this article was written, the author does not own any of the above securities.