SiriusXM closed down today on lower than average volume. In my opinion the peak was the $3.39 we saw yesterday, and this equity is likely on its way to range trading between $3.25 (the 13 day EMA) and $3.35. That is not that bad considering that the old base was $3.00 and $3.25 was a virtually impassable wall. There is a price point below $3.25 that we must keep on our radar. That is the 50 day moving average. The 50 day EMA sits at $3.11.
Earlier this year SiriusXM spent a good amount of time trading between the 10 day EMA and testing above the 5 day on small runs. If that pattern happens again we will see a range base at $3.25 and the equity testing the higher levels just above $3.30. In my opinion the strategy is a possible sell now and a wait for retracement to pick up the nickle or perhaps a dime if $3.20 gets tested. These could be buying opportunities setting up for a longer term run. The next big run on SiriusXM takes it to $3.50. It could be in the mid term (45 days or more out), but it is the most likely situation. A buy at $3.20 or so to gain 30 cents in a couple of months is a decent play in my opinion.
This low volume is what I was cautioning readers about. It appears that the top is in. Now we want to see the share price and volume bottom out. The bottom on volume should be in the 25 million share area. Pay close attention. Holders that are more conservative will likely simply hold. Active traders now have some range to work with. Watch closely.
Support and Resistance
The key here is $3.24. Support there is moderately strong, so it is the first level of defense below. The next step is at about $3.20. It is not a real worry unless this equity tests $3.25. Resistance above is forming at $3.35. This will likely become a short term ceiling.
Exponential Moving Averages
The EMA's remain all bullish. What we want to watch for now is the migration of each average up. There is plenty of wiggle room before any bearish signals develop. Pay close attention if these averages begin to close in on each other.