American International Group (AIG) 3/15/10 Daily Market Radar Technicals Showing Bullish

Posted: Monday, March 15, 2010 8:21 AM EDT
By: Market Intelligence Center Staff

American International Group (NYSE: AIG) ended the last trading session at $34.23. So far the stock has hit a 52-week low of $8.22 and 52-week high of $55.90. American International Group stock has been showing support around 32.22 and resistance in the 37.46 range. Technical indicators for the stock are Bullish and S&P gives AIG a neutral 3 STAR (out of 5) hold rating. AIG appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Aug '10 32 covered call for a net debit in the $28.03 area. That is also the break even stock price for this trade. This covered call has a 159 day duration, provides 18.11% downside protection and a 14.16% assigned return rate for a 32.51% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the AIG Jan '11 22.50 Call and selling the Aug '10 32 call for a $6.85 debit. The trade has a 159 day life and would provide 14.26% downside protection and a 38.69% assigned return rate for an 89.00% annualized return rate (for comparison purposes only). American International Group does not pay dividends at this time. [ABR-Seven Summits Research]