AIG - Short-term trading opportunity.

AIG is down 72% since the 1 for 20 reverse split. It is apparent that short sellers have used the reverse split as a catalyst to aggressively attack the shares. AIG's long-term fundamentals are terrible and there is the real likelihood that the common equity is worth zero once the liquidation of the assets is completed (probably years out) and the government is paid back the loans. That said, mechanical and technical factors are favoring a substantial bounce back above the 10 dollar level. The stock is extremely oversold in the short-term (Stochastics/MACD) and the negative rebate rate on short sales is btwn 50-60% annually depending on the prime broker you call (getting too expensive to hold shorts). I bought a small block of stock representing just 4% of the equity in my trading account because a larger position would be somewhat reckless given the concerns I have about the fundamentals of the company. I caught a nice bounce off the pre-market sell-off on Monday and moved to the sidelines. But, the move to 8.75 appears overdone. Long for a move to above 10.