Stock Technical Analysis: Careful with AIG
Written by Sidney on August 21, 2009
If you have been following my stock technical analysis blog recently, you would have made quite a bit of money on AIG after I made a call to buy the stock. However, I also mentioned that this trade ought to be a short term trade because of short-term resistance at $30. Also, the fundamentals of the stock do not look good.
Interestingly enough, the stock price on Thursday shot past the $30 resistance level, and moved a further 1.7% today. However, today’s price action was worrisome because it gapped higher on open, but trended lower much of the day. The stock eventually closed near its low for the day (see below).
Stock Technical Analysis for AIG (21 Aug 09)
Using candlestick charts as shown above, the price action looks like an Evening Star in the making. A typical Evening Star is shown in the insert in the above chart as well. However, the Evening Star pattern would not be completed unless a sharp sell-off occurs at the next trading day, and traders need to be on the look out for this. So if you are in this stock right now, it pays to be very watchful of this short-term sell signal.
Updated Portfolio
Portfolio (21 Aug 09)
Change: Bought AIG on Thur Aug 20
Is this analysis useful? We want to hear from you - please leave your comments below! :)
Related posts:
Comments
Submit Reply
Here’s my take on KPPC: KPPC has had a decent rally from its Feb 2009 lows, but... (Nov 22, 09)
08-30-2009
3:39 pm
Sidney
Hi Nicky,
Thanks for the post! Let me review it and I’ll respond shortly!
Regards,
Sidney
08-30-2009
12:28 pm
Nicky
Hi,
Where do you now see resistance and how much left do you think this rally has left in AIG?
I notice it did pop and drop on Friday but still recovered quite a bit into the end of the day.
With thanks
Nicky