With all of the excitement happening surrounding Sirius XM (NASDAQ:SIRI), it should be little surprise that from a technical standpoint we are in the process of seeing a reversal from a bearish outlook to a bullish one. In fact, I had written about such a reversal long before it happened and gave the signals investors should watch for to confirm that trend.
Sirius XM has passed yet another technical milestone on the Exponential Moving Averages (EMA) indicator. The 20 day EMA has passed the 50 Day EMA and now all signals from and EMA standpoint are pointing to green and bullish behavior. For those that have been following these updates, the indicators have been slowly moving green for some time now. One cautionary note is that while the indicators have turned green, the EMA's are all very close, and a down day could set in motion a reversal of signals.
This is a critical point in Sirius XM, and a particular reason why I watch additional technical indicators in conjunction with EMA's. The good news is that Sirius XM is exhibiting favorable trends in other areas as well, adding support that the current EMA trend will now build strength. The bad news is that the support is weaker than the resistance, meaning possible testing of lower levels.
Volume on Sirius XM is below average of late, but not so low that it is over concerning. Today's session brought the trading of some 30 million shares, below the average of about 50 million, but respectable given the time of year and some uncertainty surround the situation with Liberty Media (NASDAQ:LMCA).
The other indicator I like to watch is the support and resistance levels. With each new day comes an adjustment, and when an equity is at a critical point, it bears keeping a watchful eye. The current support and resistance levels for Sirius XM are as follows:
- $1.92 - Moderately Strong Support
- $1.99 - Modestly Weak Support
- $2.03 - Weak Support
- $2.05 - Very Weak Support
- $2.10 - Very Strong Resistance
- $2.15 - Weak Resistance
- $2.20 - Weak Resistance
- $2.25 - Modestly Strong Resistance
As you can see, the strong resistance point has now moved from $1.91 to $1.92. That is a good thing for those long the stock. However support above $2 is weak, and could be broken through with relative ease. Meanwhile the wall at $2.10 is pretty strong with weak resistance above. The bottom line is this. If Sirius XM can pass through $2.10, there is little to hold it back from going to $2.20. If Sirius XM breaks $2.00 it could see a quick trip down to $1.92. Now you can see why these technical indicators are worth updating and watching as critical levels pass. If you are looking to trade some of your position, there would seem to be a 10% swing to the upside and downside with Sirius XM playing the middle. Positive and compelling news may be just what the doctor ordered to see the volume return and true confirmation of new support levels.