Trading Idea: What to Expect as AIG Breaks Resistance

Published on Wednesday, 18 July 2012 05:36 Written by TradersHuddle Wire

New York, July 18th (TradersHuddle.com) - Shares of American International Group, Inc. (NYSE:AIG) closed the session at $32.29 just above calculated resistance at $31.87. The stock effectively broke out and grasped the attention of momentum traders, which could eventually push the stock to a different trading range.

American International Group, Inc. (NYSE:AIG) through its subsidiaries provides a varied range of insurance and insurance-related products in the United States and abroad. The Company's main activities include both general insurance and life insurance & retirement services operations as well as financial services and asset management. AIG participates in the credit default swaps and mortgage backed securities markets.

The stock was trading in a well defined range with support at $29.97 and resistance at $31.87. Given that this range was broken, traders will be closely monitoring AIG's price action to gather clues on the future direction.

From a technical perspective, it can be expected that previous resistance becomes support, as the new range gets defined. However, given that AIG is still near the broken resistance level, traders will be focusing on the $31.87 level to see if the stock holds the breakout without rolling over.