Stock of the day: AIG

The last day of this week brings us an analysis of AIG, which we’d previously analysed at the end of May. Back then, the price was around 54 USD and we were bearish, saying:

“That breakout ends the positive sentiment and brings us a sell signal. Potential targets are on 55, 52 and 44 USD (yellow).  The sell signal cancels when the price comes back inside the channel up formation, but chances of that happening are now limited.”

That was spot on because the price dropped almost straight away. The second half of June and the first half of July brought us a correction, which closed inside of the pennant formation (blue lines). The reason we’re gathered here today is because yesterday the price escaped from the pennant to the downside, which in theory brings us a proper, long-term sell signal.

The bearish trend is back on AIG and the target for the current drop is on 45 USD (yellow), which is a key, long-term support for this instrument. Chances that we’ll get there are quite high.