Monday, August 18, 2025

UNH Just Gave Us a Masterclass in How Buffett Moves Markets

Trade of the Day Wake-Up Watchlist

"Technical analysis gives you the framework, but the market always has the final say."

Nate Bear, Lead Technical Tactician, Monument Traders Alliance

Nate Bear

Look, I'm a self-confessed trading addict who called for UNH to "gap up and probably puke" Friday morning Daily Profits Livestream.

It didn't puke.

It held…

And that price action just taught us everything we need to know about this swing setup.

When Warren Buffett buys 5 million shares at $411 and the stock gaps higher then HOLDS that gap?

That's not retail FOMO - that's institutional validation.

What Friday's Price Action Actually Told Us:

Resistance Became Support in Real-Time

I was watching that gap as potentially hitting "the point of control" - overhead resistance from the consolidation range. But when a stock gaps into what should be resistance and refuses to give it back?

That level just flipped to support. That's textbook institutional accumulation.

Here's what I've learned about big-name catalysts over twenty years: when smart money makes a public move, other institutions don't wait around.

They follow.

The fact that UNH held its gap tells me we're seeing that follow-through buying in real-time.

UNH "has been pretty darn beaten up" along with the whole healthcare sector. But sector rotations don't start with retail traders - they start with guys like Buffett making big bets. When the follow-through buying shows up immediately, that's your confirmation.

 

The Setup Just Got Cleaner

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I was eyeing September $400 calls before the market opened on Friday…but I didn't pull the trigger.

But the strength we saw Friday validates the thesis. Instead of hoping for a pullback that might never come, we're now looking at a stock that's proven it can absorb selling pressure and hold key levels.

Any minor consolidation here becomes a gift, not because we're hoping for a bounce, but because the trend just shifted.

The gap hold confirmed institutional interest, which means we're not fighting the tape anymore.

September gives us time for this healthcare rotation to play out. Buffett doesn't buy for quick flips - he buys for moves that take months to develop. That aligns perfectly with our option timeframe.

This is why we watch price action, not just levels.

Technical analysis gives you the framework, but the market always has the final say.

When strength shows up where you expected weakness, that's usually the market telling you something important about where the big money is flowing.

Your Action Plan

I'm watching for any small pullback or consolidation as an entry point. Given how expensive the stock is, I think the best way to play it is with short term (30 days or less) out of the money options.

I call these "lotto plays."

They are not high probability trades, but if you're able to hit one winner, it can sometimes pay for 10 losers and then some.

The gap hold on Friday was our confirmation that institutional money is stepping in behind Buffett's lead.

Sometimes the best education comes from watching how quickly the market can shift when real money shows up.

UNH just gave us that lesson in real-time.

If I decide to move on this, Daily Profits Live subscribers will be the first to know.

If you're not a subscriber, and would like to learn more, click here to get started.

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Unicorn - Price Chart
 

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