After hitting the highest point of this year, at 58.66, the AIG stock (NYSE: AIG) started drifting lower, this way establishing a short-term tentative downside resistance line taken from the high of September 19th. We can see that the price is very close to its key support area between the 51.20 and 51.66 levels, marked by the lows of October 29th and September 3rd respectively. In order to get comfortable with lower areas, we will wait for a daily close below that support zone first, hence why we will stay somewhat bearish for now.
If, eventually, we do see a daily close below the above-discussed support territory between the 51.20 and 51.66 levels, this is when more investors could start liquidating some of their existing positions, as it could increase the probability of a further downslide. Such a move could force AIG to drift further south, potentially testing the 49.41 hurdle, a break of which could set the stage for a possible move to the 47.80 area, which is the high of May 1st.
Our oscillators, the RSI and the MACD, are also somewhat in support of the downside scenario. The RSI is below 50 and points lower. The MACD is below zero and its trigger line, and also points to the downside.
Alternatively, for us to consider higher levels, at least in the near term, a break of the aforementioned downside line and a push above the 55.00 barrier would be needed. The 55.00 hurdle marks the inside swing low of November 8th, which if broken could act as a gateway towards higher areas. We will then aim for the 56.32 obstacle, a break of which could set the stage for a move to the 58.66 level, marked by the highest point of this year.
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