Shares of Allergan (AGN) - Get Report are performing quite well on Friday. The stock is up over 2.5% and is one of the top 10 gainers in the S&P 500.

This news-inspired surge has pushed Allergan to new December highs as a fresh rally leg appears to be on the way. In the near term, Allergan bulls should take a more positive view of the action.

Allergan was hit extremely hard during the second half of October. In early November, shares dropped another 10% before finding support near the $186 area. The stock rebounded nicely following the election but was unable to maintain the momentum. Two weeks later, Allergan was retesting the initial November lows and did so again in early December as the stock remained in a very narrow range.

Jim Cramer and Jack Mohn of Action Alerts PLUS wrote recently that "the biotech sector as a whole remains hostage to any political commentary that can arise on any day at any time." They said of Allergan stock, which is a holding in the portfolio, "We continue to believe in the pipeline and in CEO Brent Saunders' leadership in the drug community to limit egregious price increases, something that should protect the company from regulatory action (even though AGN stock gets lumped into a basket with other biotechs in the short term)."

"The company trades at the cheapest valuation of all the major drug stocks based on growth rate," Cramer and Mohr adeed.

Allergan is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sellsAGN? Learn more now.

As the stock begins to perk up on Friday, an impressive basing pattern is taking shape.

Allergan could be leaving behind a major bottom near the November and December lows. If shares can continue to put in higher weekly lows, which the stock hasn't done since July, the base will strengthen. In the near term, Allergan investors should consider the stock a buy on weakness. Initial support runs between $197 and $196.

On the downside, a close back below this week's low of $189.80 would indicate more basing is ahead. A key challenge for the stock will be the 50-day moving average. This key indicator capped both the September and October highs. The 50-day is currently at $202.10.

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This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.