There was a lot of crazy action today with AIG. First let me tell you about what trades and mistake I made today. First, yesterday I took a long position with AIG at $45.85. This morning in the pre-market I sold the portion of my shares representing my gain at $54.13. Then my trailing stop loss order of $3.45 that I placed after selling those shares got triggered, and therefore the rest of my shares were sold at $51.03. Overall I've made a pretty good gain for the day. However shortly after having sold my shares at $51.03, the share price started to bounce back up a bit around $52.00. I then made the greedy mistake of buying some new shares at $51.58, based solely on the feeling I had towards AIG that it would do like last time and bounce back up higher. This may still happen in the coming days, but it didn't happen today. Finally I got my stop loss order triggered at $48.38 where all my new shares were sold at a loss of just under -7.00%. Despite all this, I still manage to make a small profit in one day, but lost a good portion of it stupidly, and simply due to greed. The lesson to be learned in this, is that when you start making gains, and eventually get stopped out don't jump right back in, and WAIT for the next signal. If you do jump back in on the same day, buy at less than your last selling point. Something that happened today that I should have foreseen is the fact that AIG moves so fast that it does things that other stocks will take a couple days to do, that AIG will do in the same day. What AIG did today was rally in the morning to its resistance level of $55.00 which it didn't manage to break, and fell back to its new support level which was until yesterday its last resistance level at $45.00 where AIG stands now after the after-hours. So, to conclude I'm giving AIG a WAIT signal. If AIG goes over $55.00 and closes above this level, AIG is yet again a BUY. If AIG breaks down below $45.00 and closes below this level, it's a SELL, and it is then possible to see AIG fall back within its narrow trading range around $40.00. A break below $40.00 would be another SELL signal. One negative signal we got today with AIG is the fact that it closed lower than its opening price (possible dark cloud formation). But we also got a positive sign with AIG holding at $45.00, but we'll most likely know tomorrow which way AIG will really go.
Trading Result:
September 21st: Entered AIG Long Position @ $45.85
September 22nd: Sold portion of shares @ $54.13
Approximate return before commissions +18.00%
September 22nd: Closed AIG Long Position @ $51.03
Approximate return before commissions +11.30%
September 21st: Entered New AIG Long Position @ $51.58
September 22nd: Closed AIG Long Position @ $48.38
Approximate loss before commissions -6.20%
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