This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Breakout Stocks to Trade for Gains

Stocks in this article: ESRX AMZN RIMM DX AIG

American International Group

American International Group (AIG), the controversial insurance giant, is another name that's looking bullish from a technical standpoint in April. Shares starting forming a rounding pattern at the start of March, and a confirmed breakout in yesterday's session points to some more legs to the 34% rally AIG has enjoyed year-to-date.

Typically, a rounding pattern is seen at the bottom of a firm's price action (there, it's better known as a "rounding bottom"). The pattern in AIG is a good example of why it's never a good idea to just memorize the rules associated with popular patterns -- instead, it's much better for traders to understand what actually causes them.

In the case of AIG's rounding pattern, this setup indicates a gradual shift in control from sellers to buyers. The breakout level comes in at the resistance level where the pattern began; that's significant because that $30.50 resistance level is a price where AIG's uptrend got derailed.

So we know that there's a glut of supply of shares at $30.50 where sellers are more eager to sell and take gains than buyers are to buy. Yesterday's breakout above that price level now tells us that the excess supply has finally been absorbed by buyers.

If you decide to take this trade in AIG, I'd recommend keeping a protective stop at $28 support.

AIG, one of Bruce Berkowitz's holdings, was also featured last month in " 5 Stocks Insiders Love Right Now."

5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs