Stock Technical Analysis: When to Sell AIG?
Written by Sidney on August 30, 2009
I recently received a request to look at how much momentum is left in the AIG rally, so here’s my take on the subject!
From the stock technical analysis below, AIG prices are facing a band of resistance between $56.80 and $60 formed by the highs of Nov 10 and Oct 13. With a closing price of $50.23 on Friday, it seems that AIG stocks will likely face headwinds fairly soon in overcoming this resistance. Another point to note is that the Fibonacci (upward) 50% Retracement level stands at $60.30, taking the low on Mar 9, 2009 ($6.60) and the high on Sep 23, 2008 ($114). This adds more weight to this resistance level. Of course, once this band of resistance is cleared, more upside is expected.
Stock Technical Analysis of AIG (Aug 30, 2009)
The best short-term sell indicator would be signs of bearish reversals on candlestick charts. The price action over the past 2 trading days suggests that an Evening Star formation could be in the works, but a sell off is required on the following day to complete the pattern. Traders need to be on a lookout for that sell-off tomorrow (Monday), should it occur.
A sell-off of the stock may push prices to its near-term support of between $40 to $43.80, which are the recent peaks in Mar and May 2009, representing a correction of about 20% from its Friday closing.
Good luck trading this stock! 
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