Sirius XM Builds Support Above $1.00
The trading action on Sirius XM yesterday had a lot of people a bit nervous. The equity closed directly on the $1.09 support/resistance level, only one step away from weak support at $1.02. Typically such activity is not real concerning, but this time the equity happens to be in the midst of trying to regain NASDAQ compliance, and staying above the $1.00 mark is paramount.
Today that sound you hear are sighs of relief as the stock moved up above $1.10 and seems to be consolidating. That is good news because should the stock hold this level, there are now two support levels below. One at $1.09 which is moderate, and another at just above $1.00 which is now a bit stronger than it was yesterday.
Above current levels is resistance at $1.14. In a perfect world the equity would spend a few days consolidating and building a stron foundation for another move up. While I have no crystal ball, this looks like it will happen. As all of this happens, some other stars seem to be aligning:
1. Car sales for April should be good as consumer friendly incentives continue. Already projections are for sales to be just over 1,000,000 units with a SAAR rate between 11 million and 12 million. These numbers are above the numbers used by Sirius XM in developing and issuing their guidance. This means the company should be ahead of guidance, and perhaps will make adjustments.
2. Sirius XM has been quiet on the Q1 conference call date. i like this because it takes the call out of the equation during this run for compliance. The call is anticipated early in May. Subscriber numbers are already known, as is churn. Hopefully the company will announce the call sometime after Tuesday.
3. Timely news from the company and numbers that show that Sirius XM is on track can allow for the equity to build on their foundation at $1.10 to $1.12. Because decent numbers are anticipated, the speculative traders may want to position themselves for a small pop in the stock, rather than a let-down. This could build volume and an appreciation of the stock price.
In my eyes, the company needs to gain compliance by staying over $1.00 until Tuesday. I see them building support at current levels until then, and the moving up above $1.14 to build additional support leading into the call. Conference calls always make for interesting trading, so it could be harder for the company to get into the $1.20’s, but it is possible. What I will be watching closely is the volume the stock has at the various stages. Any move on moderate to low volume will not have the legs to last. We want to see 100,000,000 plus shares traded at the key levels on a consistent basis to build strong support. Of course, this is speculation, but it my two cents for the day. Monday will be a new day, with new data to digest.
Position – Long Sirius XM Radio
THANK YOU SPENCER FOR COMING BACK AND BRINGING SB RADIO BACK!
Thanks Tyler, welcome back from the dead! :0)
Spencer,
I think you are accurate in your assessment of the technical strength and base we have been building. I know you don’t like to be overly optimistic and you may be conservative in your estimate of how high this could run into the conference call.
I’m not a journalist and will speculate much more, so I will say that we could get to as high as 1.37 before a pullback.
Now 2 CC’s ago we did not get a run up into the call, last one we had a big one as high as 1.18. If we get over 1.18 with heavy volume, I think we run to close to 1.40.
Today is not over yet, but looks like Day 8 is in the books and hope to seea little surge of volume and uptick to 1.12 – 1.13 to give us some breathing room.
The low volume is baffling . . just 25mm shares traded at 3:40PM?
Eh, as long as the price holds who cares.
amen…
great read spencer ! also…..great radio show last night !
it was nice to hear demian call in…it would be great to hear you call in on their shows when they start them up.
iv’e allways admired & respected your analysis……semi conserveative and realistic….not a pumper….
keep it comeing !
Could you explain the shocking drop (between 17 and 3 fold) in the number of shares traded in the last several days? Could this be related to SEC investigation of GS or may be some other events or this is just a coincidence? I am very suprprised at the stock’s minimal movement range almost for a week. Have manipulators left siri alone? If yes, why? This situation appears to be inexplicable for a layman.
I fear a consolidated attempt by the shorts/bears/manipulators on Monday/Tuesday to poor it on and try and attempt to DERAIL the compliance run !
Methinks that if Mel and Co. have any thing up their sleeves i.e. Stern Contract sealed, THEY SHOULD RELEASE on Monday !!!
” Pour “……………it on