Since around the beginning of November of 2018, the American International Group Inc. (NYSE: AIG) has been held steady from moving higher by the 44.20-dollar price tag. We can see that throughout this period, the stock kept knocking on the door of that level but failed to go through it. After failing to move below the support zone at 40.00 on February 14th, the share price reversed back up and has now tested the 44.20 level once again, this way forming a potential inverse head-and-shoulders pattern. But before we can continue with the assumption that this could be case, we would like to see a break above the so-called “neckline” and only then we will target higher areas.
A push above the aforementioned 44.20 barrier, or even better, a break above the 45.00-dollar price tag, marked by the high of November 6th, could invite more investors to join the action. This could allow the stock to travel further in the upwards direction, potentially hitting its first strong area of resistance, at 47.35, which is the high of October 22nd. If the buying doesn’t end there, the share price may rise to the 49.56 obstacle, marked by the low of May 3rd, or it could even accelerate towards the 51.20 level, which is the low of the August 10th.
Alternatively, if the stock reverses lower and drops below the 41.82 hurdle, marked by the low of February 8th, this might raise concerns over the stock’s potential to travel higher. We would then examine the possibility of seeing AIG sliding to the 40.00 barrier, a break of which could drag the price towards the 38.36 obstacle, which is the low of the last day of 2018.
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