Some SIRI investors are anticipating a run-up going into earnings. It is something that has happened like clockwork over the years, and it looks to be happening again. The age old question however is whether or not SIRI can hold the gains once the numbers are announced. I have long been of the opinion that it will take several quarters of pure and strong metrics to allow SIRI to maintain the steam after a conference call. Even with the bullish run over the past two trading days, SIRI remains in the middle of a trading range between $0.90 and $1.10.
As readers of this site know, I like to watch volume, support and resistance and moving averages. I prefer these technical indicators because they are easy to follow and without too much drama you can have a decent indication of what is happening with the stock.
From a volume perspective SIRI has had two great days of volume on an upward move. To me this bodes well and helps establish new and stronger support levels. From a support and resistance standpoint, SIRI has now closed directly on the very strong $1.02 level. I would have preferred to close above $1.02, but this is SIRI, and nothing comes crystal clear when it comes to this equity. That being said, closing at $1.02 on decent volume is good. Now enter the moving averages. I have been watching the exponential moving averages. They are once again converging, and with a close at $1.02, the EMAs will be giving off very bullish signals. This is good.
With the Q2 conference call only about a week away, the natural question is whether this is the typical run up prior to a call, or is it another more natural indication that a reversal is at play. For the moment, I would lean to the recent action being a play on the pending conference call. What will be interesting is if SIRI can hold these gains after the call. What we need to watch for are reasonable moves that carry good volume. If the equity moves too high too quickly prior to the conference call then we will see a retracement. Traders will be playing these moves while longs and those in cash will be waiting to see the numbers.
Technically things look good, but understand that this move may have little to do with technicals, and could be more about a conference call play. Time will tell.
Position - Long Sirius XM Radio