It is almost as if Sirius XM is in a tennis match with the net being the $1.00 mark. Time and time again over the past month the equity has bounced within a range of $0.90 to $1.00 with neither the bulls or the bears being able to gain an advantage or even take this game to match point.
The trading range has many people frustrated, but there are some who love this type of action. The traders hop in and out of this equity with moves as little as a penny, and the continuous volley plays right into their hands. The real question on the table is when one side will gain momentum, and take this tennis match outside the lines.
From a technical standpoint we also have a mixed bag. One day the signals say buy, and the next it seems like a sell. One thing is certain here. It will take something big to move the equity one way or the other. The trend is not up or down. The trend is virtually sideways and within a range of plus or minus 10%.
Possible catalysts are the Howard Stern deal, better economic news, and a strong August in auto sales. All of these are not going to happen anytime soon. If Stern was signed it would be a material event and would have been announced with an 8K. That news is at least a month away in my opinion. The economic news just can't seem to brighten, and Wall Street seems to have little confidence in the Feds latest moves, and auto sales for August are still three weeks away. Thus, a sideways range is seems not only likely, but the only realistic assumption that can be made at this point.
The key right now is perception. Sirius XM needs to stay above that $1.00 level, and try to build a very strong support here. Most analysts are neutral to bullish on the stock, but it is now a numbers game and we have almost three months before the next set of financial data is issued. For now, like satellite radio 2.0, it is a waiting game and the dynamics are anyone's guess.
Position - Long Sirius XM Radio