American International Group, Inc. provides insurance products for commercial, institutional, and individual customers in North America and internationally.
Take a look at the 1-year chart of American International Group (NYSE: AIG) with the added notations:
AIG has formed an important level of support at $52 (green) during the past several months. The stock looks like it might be coming back down to that level again, and traders could expect some sort of a bounce, if it does. However, if the $52 support level were to break, lower prices should follow for AIG.
The Tale of the Tape: AIG has key support at $52. A trader could enter a long position at or around $52 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
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