Shares of American International Group (AIG) have formed what we consider a "bullish reversal pattern."
The AIG chart, below, shows that the stock price had found consistent support around the $52.00 level from April through the middle of October in 2018.
That support was violated in mid-October with an increase in trading volume that resulted in a three-month long price decline with a definable downtrend line as noted.
Price eventually bottomed out at the $36.50 level during the month of December.
January finally saw a violation of the downtrend line as well as a move above its 50-day moving average, rallying to the $44.00 level that then functioned as resistance over the next several weeks.
Source: Worden
Mid-February saw a gap down on very heavy trading volume. However, even with the magnitude of intense selling, AIG managed to make a higher low than those made in December.
From that point, AIG managed to make a series of higher lows but was unable to violate resistance.
Thursday, although trading volume is not notable, resistance has finally been violated to the upside with no notable overhanging resistance appearing, in our opinion, until the $52.00 range.
We would now suspect price support to be exhibited at the prior $44.00 resistance level.
Bottom Line
Given that AIG managed to break its prior downtrend, create a series of higher lows while reclaiming its 50 DMA and finally violating resistance to the upside, we suspect AIG has now formed a "bullish reversal pattern."
At the time of publication, Ortmann had positions in AIG.