Arthur J. Gallagher & Co. and its subsidiaries provide insurance brokerage and risk management services to various commercial, industrial, institutional, and governmental organizations. It operates in two segments, Brokerage and Risk Management. The Brokerage segment primarily consists of retail and wholesale brokerage operations. Its retail brokerage operations negotiate and place property/casualty, employer-provided health and welfare insurance, and retirement solutions primarily for middle-market commercial, industrial, public entity, religious, and not-for-profit entities.. The Risk Management segment offers contract claim settlement and administration services for enterprises that choose to self-insure some or all of their property/casualty coverages, and for insurance companies that choose to outsource some or all of their property/casualty claims departments.
To review Arthur’s stock, please take a look at the 1-year chart of AJG (Arthur J. Gallagher & Co.) below with my added notations:
CSC had worked its way higher from its $34 bottom in December up until its peak in May. Then, for about (6) months the stock had been stalling at a $45 resistance (red), which was also a 52-week high resistance. Finally, last week AJG broke through that $45 resistance.
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The Tale of the Tape: AJG broke out to a new 52-week high and now may be pulling back. A long trade could be made at $45 with a stop placed below that level. A break below $45 would negate the forecast for a continued move higher.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach