We have been bearish on American International Group (AIG) for a while now and reviewing the latest charts of AIG has not changed our opinion.
Source: BigCharts.com
In this daily chart of AIG, above, we can see a chart that is still vulnerable to further declines. Prices are below the declining 50- and 200-day moving average lines. The On-Balance-Volume (OBV) line has been pointed lower the past 12 months and is still pointed down. A downward-sloping OBV line tells us that sellers have been dominant for months, with heavier volume on days when AIG has closed lower. In the lower panel is the 12-day momentum indicator and it has yet to display a bullish divergence.
In this three-year weekly chart of AIG, above, we can see that prices are below the declining 40-week moving average line. The weekly OBV line is flattening. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and just signaled a new sell signal. AIG is pointed down with weak indicators and is likely to slide further.
I anticipated that a close below $50 would precipitate further losses, but now it looks like a close below $48 will be needed to put the bear in control.
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Let's review what happened to this financial giant in 2008 and what it could tell investors about the current market.
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