American International Group, Inc. (AIG) was reviewed in the middle of March and I was bearish: "AIG looks like it is heading lower to retest and maybe break the lows of 2016 in the $50 area." AIG touched our $50 price target yesterday so the question becomes what now?
In this daily bar chart of AIG, below, we can see that prices gapped to the downside this week to retest the lows of 2016. Prices are below the declining 50-day moving average line and the bearish 200-day line.
The daily On-Balance-Volume (OBV) line has been going up and down with the price action the past year but recently has diverged from the latest leg lower. The 12-day momentum study shows a pattern of higher lows from February for a bullish divergence when compared to prices.
In this weekly bar chart of AIG, below, we can see that prices are below the declining 40-week moving average line. The weekly OBV line show a rough decline from early 2017.
In the lower panel is the Moving Average Convergence Divergence (MACD) oscillator which has begun to narrow towards a possible cover shorts buy signal.
In this Point and Figure chart of AIG, below, we can see a further downside price target of $48.
Bottom line: AIG looks "sold out" but we still have a lower price target of $48. AIG might try to base around $50 but a close below $50 will keep the trend bearish.