dea: Long AON (Aon plc)
Entry: $358.00
**Stop Loss:** $336.00
Take Profit: $404.00
**Risk/Reward:** ~1:2.1 (Risk $22 / Reward $46)
Timeframe: Swing Trading (Weeks to Months)

The Setup

Aon has dropped from its 52-week high of $382.34 to current levels around $356.65, now sitting on a critical daily support zone near $350-$358 where buyers have repeatedly stepped in.

The daily chart shows a Connors RSI(2) reading deep into oversold territory. Larry Connors' research demonstrated that a 2-period RSI below 10 in an uptrend produces statistically significant mean reversion. While the exact reading fluctuates, the combination of extreme short-term exhaustion, a major support level, and strong fundamentals creates a high-probability setup.

This is a classic pullback play — the RSI(2) signals sellers are exhausted, favoring a bounce from support.

The Fundamentals

Aon delivered 5% organic revenue growth in Q2 2026 across all four business lines, reaffirming guidance of mid-single-digit growth, 70-80bps margin expansion, strong EPS growth, and double-digit FCF growth.

Key metrics: Forward P/E of 17.72, net income +50.4% YoY, EPS +52% YoY, and a perfect Piotroski Score of 9/9.

Analyst backing: 22 analysts maintain a "Buy" consensus with average target of **$402.47** — 12.85% upside. Recent upgrades from Mizuho ($437), KBW ($412), Jefferies ($414), and Goldman Sachs ($430) provide institutional validation.

Technical Levels

The stock is consolidating between $350.23 and $357.09, with daily support at $350-$358 acting as a floor. Multiple touches without breaking lower suggest accumulation. The front put wall at $340 provides additional structural protection below our stop.

Entry at $358** offers margin above recent lows. **Stop at $336 sits below the put wall ($340) and 60-day MA, offering a tighter risk profile. **Target at $404** aligns slightly above the consensus analyst target ($402.47) and sits below the most bullish calls ($437, $430).

The Trade

The improved 1:2.1 risk/reward ratio offers favorable asymmetry. With RSI(2) signaling short-term exhaustion, a clear daily support floor, and strong fundamental backing, the probability of a mean reversion bounce is skewed in the buyer's favor.

The Catalyst

The Q2 earnings beat on July 29 triggered the initial spike. The pullback represents classic post-earnings digestion — profit-taking after a strong report. The fundamental story remains intact: 5% organic growth, margin expansion, double-digit FCF, and aggressive buybacks ($1B+ in 2026). Additional catalysts include continued analyst upgrades and Aon's strong positioning in the hardening insurance market.

Key Risks

Aon trades at a premium to peers (Marsh & McLennan), faces FX headwinds from international exposure, and a break below $350 would invalidate the support thesis. The $340 put wall provides structural protection, but any breakdown below that requires reevaluation.

Conclusion

Aon offers a high-probability mean reversion swing trade built on three pillars: technical (RSI(2) oversold + daily support), fundamental (5% growth, 50%+ net income growth, 17.7x P/E, perfect Piotroski 9/9), and institutional (22 analysts, Buy consensus, $402.47 average target).

Entry $358, Stop $336, Target $404 — a clean, risk-defined setup with favorable asymmetry. Buying this pullback at support with RSI(2) signaling exhaustion should be well-rewarded as the stock mean-reverts toward fair value.

⚠️ Disclaimer: This is a personal trading idea, not financial advice. Trading involves substantial risk of loss. Always conduct your own research and risk assessment.