AIG

Most probably its brand is well established in this part of the world, I have many friends and friends of friends asking me for the past few months the golden question - "can buy or not?"

Let's me be honest here, technical analysis can work well with futures because we do not have to worry about magician book keepings and bankruptcies. So when I apply technical analysis on stocks, I am a bit of worried. I mean stocks like Transmile and IOI can flunk so much nasty surprises, what else can we say about those newly IPO stocks which reported beautiful sets of accounts before and during their debut and then flop within the next 2 years.

So as AIG is concerned, whatever I write here is purely from the TA readings and nothing to do with its financial background. But from I have gathered from those left handed sources, you should be careful with many of these US financial stocks because many of them still have some skeletons hidden deep inside their closet. Stocks like AIG is now riding with the DJIA in a nice bull rally, but my thinking is :- take profit whenever the signal is in (like a closing below the 30 SMA or a MACD crossdown etc) This is still a time of big crisis and not a time for buy and hold mentality.

AIG has recently strongly rebounded from 0.31+ to the current 1.60. I know there are some of those self acclaimed great "buy low sell high" artistes will say "I told you so". But I also know someone who thought 3.00+ was very low and got in and bought this stock. From the daily chart, I would touch this stock until when it broke the top Bollinger Band or the MACD crosses up above its zero signal line in mid March. If you are thinking of buying in this stock now, then the next signal would be to park your buy 2 ticks above the high hit 2 days ago.


Both its daily and weekly chart are extremely bullish with divergences as it is now recovering from an extremely oversold situation. Though I note that the weekly chart MACD is still relatively far from its zero signal line. With this, this stock may go back and test the low sides. But if it goes northward smoothly, then It should easily retest the 19.00 area. Keep 0.88 as stops. BUT remember what I said in the 2nd paragraph. Stocks are not like futures, they can go bust anytime, so keep your ears up for any bad news and react accordingly and never try to cheat yourself that that this is a solid counter!