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by Darius Anucauskas

AIG Stock Is Correcting Within A Rising Channel

Overall, the AIG stock (NYSE: AIG) is still on an uptrend, trading within a medium-term rising channel, which has been in play from around the beginning of December last year. But after hitting a new high this year, near the 57.56 zone (where the upper side of the channel was tested as well), the share price moved back to the beginning-of-July lows. Now the stock seems to be showing willingness to drift a bit more to the downside, but such a move might be short-lived, as AIG may get held near the lower bound of that channel. If it remains intact, we could see a rebound and a move back towards the recent highs. This is why, for now, we will consider any move lower, as a temporary correction before another leg of buying.

As mentioned above, another slide may bring the price to the 52.08 hurdle, which acted as a strong support on June 26th. Around there, the stock could test the lower side of the aforementioned channel, which, if stays intact, could invite new buyers back into the game. Such action might help AIG to push back up again, aiming for the 54.45 and 54.88 levels, marked by the high of June 21st and the low of July 17th, respectively. If that resistance area fails to withstand the buying-pressure, its break may lead the stock to the 57.56 level, marked by the highest point of July.

Our oscillators, the RSI and the MACD, are in support of the above-discussed idea, as both continue to point lower. At the same time the RSI sits below 50 and the MACD, after topping in July, had shifted below its trigger line.

On the other hand, if the lower side of the channel fails to hold the price from falling, its break and a stock-drop below the 50.65 area, which is the low of May 31st, could spook new investors from entering and the current ones could liquidate on some of their current positions. At that point, the stock could be trading already below the 200-day EMA, which could add more negativity to the near-term outlook. This move may clear the path to the 49.41 obstacle, a break of which might send the AIG to the 47.80 zone, marked by the high of May 1st. This move would also fill the breakaway gap, formed between May 6th and 7th. If the price gets a hold-up around the 47.80 area, we could even see it retracing slightly to the upside. But if it struggles to push back above the 200-day EMA, AIG could get engaged in another round of selling. If, eventually, the 47.80 hurdle fails to withstand the selling pressure, a break of it could lead the stock to the 46.12 level, marked by the low of May 6th.

AIG daily


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