Below Support- AIG

Published on Monday, 23 August 2010 06:48 Written by Christian Paolinetti

New York, August 23rd (TradersHuddle.com) - Shares of American International Group, Inc. (NYSE:AIG) closed the trading session at $35.17 below calculated support at $35.51 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.

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.

AIG's stock was trading in a well defined range with support at $35.51 and resistance at $42.19; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that AIG's stock is still near the broken support, traders will be focusing on $35.51 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in AIG can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $35.51. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.