UnitedHealth Group (UNH) shares fell to four-year lows below $379, declining for the fourth consecutive session. Since management cut full-year earnings guidance by about 12% in mid-April, the stock has dropped in 12 of the last 16 sessions.

UNH’s recent decline contrasts with recent broader market optimism. However, on Friday, the Dow Jones Industrial Average, which includes UNH as a major component, also fell as UNH dropped another 1.7%.

Market anticipation is centred on US-China trade discussions, with potential tariff reductions hinted by President Trump. UnitedHealth’s substantial 37% sell-off follows its revised full-year EPS guidance from $29.50-$30.00 to $26.00-$26.50, prompting shareholder exits.

The higher medical care ratio from 84.3% to 84.8% in Q1 resulted from more seniors on plans and Medicare payment changes. UnitedHealth’s CEO stated these issues are seasonal and efforts are underway to restore growth rates.

A lawsuit was filed accusing UnitedHealth of policy changes after public backlash without informing shareholders. As UNH traded below $380 and below the 100% Fibonacci Extension level, potential investors are cautious about entry points. Historical trends suggest V-shaped recoveries following past sell-offs.

What this tells us, quite plainly, is that the mood around UnitedHealth has soured quickly, and there’s little ambiguity in why that’s happened. Since the earnings revision in mid-April—a downward adjustment of nearly 12%—the stock has come under sustained pressure, retreating in three-quarters of the following sessions. The pace of exits from long positions has been remarkably forceful, and considering the Dow Jones itself reflected broader uncertainty last Friday, there isn’t enough positive sentiment right now to lend UnitedHealth a hand. The sharp divergence between this and the overall market’s prior climb lays bare the lack of immediate faith in the company’s current narrative.

The root cause seems tied to a rising medical care ratio, now sitting at 84.8%, up from 84.3%. That’s not trivial. A 0.5 percentage point change, when scaled across one of the largest insurers in the United States, suggests real pressure on margins. In simple terms, they’re paying out more in claims relative to premiums collected. Management attributes this to demographic trends—more senior citizens enrolling—as well as Medicare payment adjustments. The explanation they offered posits that these cost strains are temporary, seasonal even. And while that may be true on a longer arc, it isn’t particularly calming in the near term.

Then, there’s the legal overhang. The lawsuit alleging non-disclosure in policy adjustments isn’t helping ease concerns, especially in a market that’s become far more sensitive to governance issues. These things have a tendency to depress interest—not because traders believe the suit will necessarily succeed, but because the existence of such headlines often creates uncertainty about risk exposure and strategic messaging from management.

From where we sit, the technical picture adds one more layer to this already unsettling setup. UnitedHealth is trading below the 100% Fibonacci extension from its previous cycle—usually a level where some traders expect to see stabilisation or even reactive buying. Instead, what we’re seeing is this floor failing to produce any sustained bounce. A weak response at such a level shouldn’t be ignored—it can indicate that natural buyers are standing aside.

Of course, historical patterns show that UnitedHealth has staged fairly determined rebounds from similar drawdowns. Those V-shaped recoveries are tempting to bet on. But the current slide is not being driven by a single earnings miss or a one-off charge; it’s reflecting concerns about future earnings capacity and possibly deeper structural changes to health plan economics.

For now, understanding that the company’s fundamentals may take longer to recalibrate than investors anticipated should discourage premature optimism. While some may be tempted to treat this as a value opportunity, especially as shares dip beneath four-year thresholds, we have to ask: what’s changed, not just in price, but in what the business is likely to earn? The repeated market rejection of this stock at lower levels supports a view that many are still reassessing, not just reacting.

On derivative desks, that shift in perception often invites recalibration of hedging frameworks. Rather than assume stability or move to capture cheaper premiums with outcome-based trades, it’s worth evaluating whether implied moves are still underestimating tail risk. Ignoring that possibility could be costly in a name where margin compression and legal distraction may be more than short-term noise.