AIG Returns to Its 2015 Highs

Since its Nov. 4 close shares of American International Group (AIG) have been on a tear. At Friday's peak the stock had surged over 12% during a six-day, post-election winning streak. This powerful ramp, which featured four gap higher opens, has reached a very significant area. For patient AIG investors a pullback may be soon on the way and with it, very attractive entry opportunities.

After rallying over 25% from the Brexit low, which held major support near the 2015 bottom, AIG fell into a narrow consolidation pattern. As the third-quarter earnings report neared the stock appeared headed for an upside breakout from this bullish set-up. The exact opposite happened on the morning of Nov. 3. AIG fell nearly 4% that day after a disappointing earnings report. This ugly breakdown could have lead to a steep sell-off but the stock quickly regained its footing near the September low.

After spending two post-earnings sessions under heavy pressure, AIG immediately returned to rally mode. The stock paused very briefly near it Nov. 3 earnings gap before heading into new 2016 high territory. By late last week AIG was testing a major supply zone near the 2015 highs. This key area, which runs from $65 to $64.20, marks four monthly peaks near the 2015 high. Considering the extent of AIG's current rally, further upside may be limited by this resistance area. Patient investors should keep a close eye on the $62 to $61 area as a consolidation phase begins. This key zone is marked by the stock's October/January highs. A test of this zone would offer a very low-risk entry opportunity than currently available.

This contributing writer is long AIG.

More from Stocks

Dow Fluctuates, Nasdaq Strikes Record High

Dow Fluctuates, Nasdaq Strikes Record High

GE's Exit From Dow Could Be a Blessing in Disguise, Goldman Says

GE's Exit From Dow Could Be a Blessing in Disguise, Goldman Says

Own Retail Stocks? This Chart Will Make You Want to Instantly Cash Out

Own Retail Stocks? This Chart Will Make You Want to Instantly Cash Out

Disney CEO Bob Iger Touts Benefits of His Firm's Deal for Fox Beyond Just Money

Disney CEO Bob Iger Touts Benefits of His Firm's Deal for Fox Beyond Just Money

2 Things Fed Chairman Jerome Powell Just Said Upset Investors

2 Things Fed Chairman Jerome Powell Just Said Upset Investors