Sirius XM's price recent spike in Sirius XM has many investors quite happy early this week. The move seems to coincide with the presentation Mel Karmazin gave at the Bank of America conference. Karmazin did a fantastic job of outlining the current positives Sirius XM is experiencing, but perhaps the key was his outlook going forward.
For a long time SIRI stock has been about potential. With a good Q2 in the books, stable auto sales, and the fact that there is little debt due this year, investors are finally beginning to look at Sirius XM in a new light. Today's spike was nice, and the volume above average. These are positive signs. The question is how high can the equity run?
Personally I would like to see more volume, but that is my style. I have much greater confidence when there is heavy volume associated with a move up. I also like to see that heavy volume have a follow through. The moving averages that I like to follow are all very bullish. This would seem to indicate a further move upward in the coming days. My caution still rests with the volume. If I had to guess I would say that another leg up is in the cards, and a retracement afterward down to $1.10 is likely. That patter on good volume would be a healthy event for the stock.
The wild cards are some of the contracts Sirius XM is currently negotiating. Always be aware of potential news. For investors this means being ready to p ull the trigger. This stock has anticipation now. If that anticipation continues it is great. If news dampers the anticipation be ready.
Position - Long Sirius XM Radio