Saturday, May 29, 2010

American International Group, Inc (AIG) - Setting Up For A Buy

Above is a daily chart of American International Group, Inc (AIG) , in the middle is the S&P500 and in the lower panel is the MACD for AIG.

In my opinion, I feel AIG could be setting up for a buying opportunity based on the following technical factors. AIG seems to have found support at the 32 to 33 area. This level has been tested many times which makes this a powerful level of support and so far this level appears to be holding.

What I really like about American International Group, Inc (AIG) is the fact that it is now holding up much better than the market, that is to say AIG is showing relative strength. Take a look at the middle panel of the S&P500. Notice how the S&P has traded all the way back down to its February lows but AIG is making a much higher low. The fact that AIG is able to hold up better than the S&P is a sign of strength and possible accumulation which in my opinion is quite bullish.

In the lower panel the MACD indicator which is still showing negative momentum but if and when the the MACD does turn up, that might be a good signal to take given the bullish technical factors I just commented about.

American International Group, Inc (AIG) closed on Friday at 35.38 which was down $1.08 from Thursday's close. Lets keep an eye on this stock.


Anonymous said...

I tried a very small (but leveraged) position. Will see. One thing I don't like about my long positions (mostly energy but I was stopped out from a few already) is the euro action. FXE plummets to 121.5 support almost every morning and fails to bounce back much. Is there FX intervention going on at this level? If FXE brakes the support, very scary proposition for bulls.

Anonymous said...

While looking for a new trade, I realized that retail investors are maxed out on bonds these days. While the FXE situation is scary, I started long TBT position via in the money calls. Kevin, let me know if TA are OK, TA is still not my forte.


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