4 Trade Ideas for AIG: Bonus Idea

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

AIG, $AIG, comes into the week at resistance. It is also at a 15½ year high. Back in September 2008 it gapped down from 214.87 to close the next day at 84.25. The RSI is in the bullish zone and rising with the MACD positive and moving higher. There is resistance at 80.75 then 95 and 125 before that gap to 214.87. Support lower is at 78.50 and 77.25. Short interest is low at 1%. The stock pays a dividend with an annual yield of 1.99% and will start trading ex-dividend on June 14th.

The company is expected to report earnings next on July 30th. The June options chain shows the biggest open interest at the 77.50 strike on the put side and the 82.50 strike on the call side. There is also good size at the 75, 77.50 and 80 calls. In the July chain the biggest open interest is at the 105 put and at the 80 and 90 call strikes. In the August chain open interest builds from 82.50 to a peak at 77.50 then fades on the put side. On the call side it is biggest at the 75 strike.

AIG, Ticker: $AIG

Trade Idea 1: Buy the stock on a move over 80.75 with a stop at 78.

Trade Idea 2: Buy the stock on a move over 80.75 and add a June 80/77.50 Put Spread ($1.00) while selling the July 85 Calls (90 cents).

Trade Idea 3: Buy the July/August 85 Call Calendar ($1.00) and sell the June 77.50 Put (70 cents).

Trade Idea 4: Buy the August 75/82.50/90 Call Spread Risk Reversal ($1.00).

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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 with the May options expiry in the books, saw equity markets with renewed strength moving to new all-time highs.

Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates in a pullback. The US Dollar Index continues to pullback in its short term uptrend while US Treasuries bounce in their downtrend. The Shanghai Composite looks to continue the short term move higher while Emerging Markets build a short term uptrend.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY are now consolidating moves to new all-time highs with the IWM closing in on 2½ year highs. 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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