American International Group, Inc. (AIG) has broken down from a large top formation. Prices have been under selling pressure all year and further deep declines are possible in the weeks and months ahead. Let's drill down on this name and see how bad things could get in the months ahead.
In this daily bar chart of AIG, below, we can see that prices are below the declining 50-day average line and the declining 200-day line. The On-Balance-Volume (OBV) line was weak from early August into late October. A weak OBV line comes from more aggressive selling. The daily Moving Average Convergence Divergence (MACD) oscillator has spent much of the past year at or below the zero line telling us that there isn't much trend strength.
In this longer-term weekly bar chart of AIG, below, we can see a neckline from 2014 around the $49 level. The recent break below $49 and the increase in volume adds to the bearish chart signals. The slope of the 40-week moving average line is pointed down and the weekly OBV line has been bearish since early 2017. The trend-following MACD oscillator is bearish too.
In this Point and Figure chart of AIG, below, we can see the top formation and a potential price target of $25.
Bottom line strategy: there is nothing bullish about the charts of AIG and with the risk of further significant declines traders and investors should stand aside.
