It was only a year ago that AIG started its historic slide into the abyss. I started writing on this site just before that time, and nailed some of this move down, along with LEH. Today, there is no more LEH but AIG is certainly providing some excitement. Owned mostly by the government, the recently split shares have been on a tear to the upside after a very recent slide. This past week saw the stock rise nearly 50% but for the month of August nearly 275%! Amazing action for a stock with a checkered past. I've been on the case of AIG for this month and nailed some upside and downside. Earlier this week I put out this note:
August 26, 2009 11:52 AM
I'M GETTING AN AIG CALL PLAY ALERT HERE…take a look, if it's over 34 should really run
Just moments later that level was eclipsed it was off to the races. I bought some calls at the 34.01 level and sold for a bagger end of day. Turns out I was premature because the stock really moved the next day.
On Friday, the stock opened over 50 and hit 54 when I sent the following messages:
August 28, 2009 7:22 AM
i'm taking the true CONTRARIAN play here…buying some AIG 30 puts for 75 cents…
this thing is coming down HARD here….too many ‘johnny come latelys'
August 28, 2009 7:27 AM
also on the 40 put here….this is coming down
August 28, 2009 7:32 AM
HUGE nuts on these AIG puts…..but that's how you get paid BIG
August 28, 2009 8:20 AM
there is a 3x - 4x to be made on the AIG puts….anyone with me?
August 28, 2009 8:54 AM
AIG puts…my second BEST call of the week….right behind the AIG CALLS
So, the stock finished at 50, a couple points under the open and well below the high and above the low of the day. What's next? We'll see, but I suspect some more downside is in order as the buyers fizzled out above 50. Any up move will be sold, as anyone who remains short is completely foolish. The downside comes from the HOT money coming out of the name, which always happens in these cases. This is about timing and focus….we have it!
Good luck, hit ‘em straight!