A rectangle pattern has emerged in the chart of American International Group (AIG), which means that traders should be ready for the stock to breakout or breakdown soon.
AIG is one of the largest insurances and financial services firms in the world. It operates through a wide range of subsidiaries that provide property, casualty, and life insurance. The company remains exposed to weather-related accidents and its revenue will be under pressure as long as the pandemic lasts. The company will benefit from cost-cutting initiatives.
Take a look at the 1-year chart of AIG below with added notations:
Chart of AIG provided by TradingView
Back in the spring, AIG had formed a clear level of resistance in the $28 area (green), which then turned into a support level once the stock had broken above it.
More recently, the stock has formed a new level of resistance at $33 (red). At some point, AIG will approach either of those two levels again.
A trader could enter a long position on a break above $33, with a stop placed under the level of entry. And a short trade could be made on a break below the $28 mark.
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AIG shares were trading at $29.31 per share on Thursday morning, down $0.55 (-1.84%). Year-to-date, AIG has declined -41.59%, versus a 5.63% rise in the benchmark S&P 500 index during the same period.
About the Author: christian
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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