Well another trading day for Sirius XM has passed and once again the $2.10 level is the battlefield. Today the company closed at $2.11 on higher than average volume. The good news is that Sirius XM maintained a trading level that keeps the Exponential Moving Averages (EMA’s) technicals bullish. The bad news is that as the battle rages on at current levels the strength of resistance levels above increases.
First things first. If you have been following these updates you should at this point be fairly secure in your strategy. If you have not, hop on board and take a look at what is to come with Sirius XM. The volume today was impressive. Gone are the ho-hum days of low volume. This equity seems set to do something soon, and just seems to be itching for a reason to run. My sentiment is that the conference call and anticipation of it will provide that boost.
Support and Resistance
As I have often said, this is a key indicator that I like to look at because it is quick and easy to obtain and digest. Understanding these levels and how they change is a good tool, but the reality is that you can get the levels from many sources and learn as you progress. What we are currently seeing is strengthening of all levels both above and below $2.10 with $2.10 gaining strength as what I will begin to term as either massive support or massive resistance. For the benefit of readers I am changing up how I report these levels by inserting them into a chart. The strength indicator will be on a scale of 1 to 10 with 10 being strongest. I also add a comment at several levels when appropriate. As has been the key, Sirius XM needs to exhibit strength in getting above this level. While closing at this level keeps bullish signals in tact, there is still substantial risk that a close below will make the wall at $2.10 that much harder to topple. As I have said before, a run up will be a great thing, but what we want to see is the energy of that run with $2.10 as a launching pad rather than having it be a substantial first obstacle.
Exponential Moving Averages
The EMA’s for Sirius XM remain bullish. The key that I last reported was that Sirius XM needed a close above $2.09. The stock did that and the reward is a nice spread developing between the 5, 13, 20, and 50 day averages. In fact, we gained a penny between the 13 day and 20 day averages. However, we lost a penny between the 5 day and 13 day averages. Everything is still bullish but we are losing some wiggle room. The next key will be seeing Sirius XM close out the week on a high note with a close at and preferably above $2.10. This is key from an EMA standpoint is to keep the spread between these averages at a healthy place. A close at $2.10 on July 27th will maintain the current status. If the equity can close at $2.11 or better we see a full alignment of EMA and Support and Resistance. That would be a positive development.
Never forget volume. Moves on Volume demonstrate strength in that move. The key battleground at $2.10 is not yet won. Confirmation with a close above $2.10 on 7-27 is very positive. Strong support below should instill investor confidence. A run to $2.20 could be in the cards in the near future if $2.10 can stay toppled.