With the hurricane Florence that is set to hit the US eastern coast, the devastations could be severe and the biggest market losers could be the insurance companies, as claims could start hitting them straight away after the storm. AIG could be one of those companies, as it is one of the largest in its industry in the US.
From the technical side, since around mid-March, AIG stock has been trading within around a $5.00 range, between 51.50 and 56.35, roughly. We are still waiting for the stock to get out of that area before it could be of an interest, either for the bulls or the bears. But given the fact mentioned above in the first paragraph, we see a possibility for the company’s share price to drop, so that’s why we will take a somewhat bearish stance in the near term.
At the time of this analysis, AIG sits near the 52.35 level, which acted as good support a few times since mid-March. If the stock moves a bit lower, it could meet support near the 51.50 barrier, which held the price from dropping lower on the 10th of August and the 29th of May. If that barrier does not hold and this time AIG closes below it, this could be a good sign for the bears to jump in and drive the stock down towards the 49.55 hurdle, marked by the spike low of the 3rd of May. If the investors won’t see any value in the stock at that price, AIG could make its way lower, maybe even hitting the 48.40 obstacle, which held the price from dropping on the 27th of June 2016.
On the other hand, for us to get comfortable with the upside scenario, we would need to see a break of the upper bound of the range, which is at the 56.35 level. This could be a good area for more bulls to join in and lift the AIG’s share price higher. The next potential area for resistance could be seen near the 58.20 hurdle, marked by the high of the 6th of March. Further acceleration of the rate could lead to a jump to the 60.50 barrier, which held the rate from moving higher on the 23rd of February. Slightly above sits the 61.40 zone, marked by the peak of the 21st of February.
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