4 Trade Ideas for AIG: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

American International Group, $AIG, fell sharply from February into March 2020, losing over 70% of its value. It consolidated under resistance, making higher lows, until it started to move higher in May. It met resistance in June and fell back into consolidation around the 38.2% retracement of the full drop. It held there for 5 months before pushing up again as it crossed the 200 day SMA. This time it met resistance at the 61.8% retracement of the drop as the chart printed a Golden Cross. After a pullback to the 50 day SMA it reversed and is back at that 61.8% retracement.

The Bollinger Bands® are opening to the upside to allow a move higher. The RSI is holding in the bullish zone with the MACD rising and positive. There is resistance higher at 41.50 and 43.50 then 45.75 and 47.50 before a gap to fill at 48.50 then 50 and another gap to fill to 51. Support lower comes at 39.75 and 38.40 then 36.75. Short interest is low at 1.6%. The stock pays a dividend with an annual yield of 3.1%. The company is expected to report earnings next on February 11th.

The February 12 Expiry options show the biggest open interest from 35 to 37 on the put side. On the call side it is much bigger and focused at 44. The February monthly options show biggest open interest at the 30 strike on the put side, but good size at 38 and 36 closer to price. On the call side there is strong open interest from 37 to 42 and then again at 45 and 50. March options have light open interest at the 40 and 35 put strikes but strong size at the 45 call.

American International Group, Ticker: $AIG

Trade Idea 1: Buy the stock on a move over 41.60 with a stop at 39.50.

Trade Idea 2: Buy the stock on a move over 41.60 and add a February 12 Expiry 40/38 Put Spread (73 cents) while selling the February monthly 45 Calls (66 cents).

Trade Idea 3: Buy the February 12 Expiry/March 45 Call Calendar (68 cents) and sell the February monthly 36 Put (40 cents).

Trade Idea 4: Buy the March 42/45 call Spread ($1.38) and sell the March 36 Put (84 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the Martin Luther King weekend and with January Options Expiration in the books, saw equity markets looking a bit tired.

Elsewhere look for Gold to continue its short term pullback while Crude Oil continues to trend higher. The US Dollar Index is trying to bounce in the downtrend while US Treasuries trend lower. The Shanghai Composite looks to continue higher while Emerging Markets meet resistance as they test all-time highs in an uptrend.

The Volatility Index looks to remain low but with an upward bias making the path harder for equity markets to the upside. Their charts look strong on the longer timeframe. On the shorter timeframe both the QQQ and SPY look gassed and are retrenching. The IWM continues to lead but may also be ready to pause. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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