ChartWatch: Be Ready to Buy AIG Shares

This earnings season could provide AIG (NYSE: AIG) investors with a reason to send the stock to $46. That would be close a 50% increase from its current price.

While it seems like a year ago, it was only two months ago that I predicted AIG shares to fall down to $28.

At the time, the shares were right at channel support (blue lines). That support didn’t hold (as expected) and AIG shares dropped.

The shares staged a recovery over the past few weeks and regained the 50-day moving average (orange line). It’s this latest recovery of the 50-day moving average that could propel the stock to $46 in a few months.

The 75% bullish advance from 2011 started after the shares regained the 50-day moving average.

This year, AIG briefly lost its 50-day moving average (much like it did before the last rally). After a brief period of consolidation in December, the shares rocketed 45% higher.

The shares have been consolidating for the past month (much like they did before their previous breakout). A 45% rally from its current consolidation zone would take the stock to $46. So long as the shares stay above $29.50 support, this 45% rally seems likely.

This chart shows the price of AIG shares along with an important resistance area for you to monitor

Equities mentioned in this article: AIG

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