We at SiriusBuzz have been covering the Exponential Moving Averages for Sirius XM, and it has been an interesting story to say the least. For technical traders, it is times like these, with a mixed bag of signals, that have many investors standing on the sidelines awaiting confirmation of a trend. Yesterday Sirius XM traded up all day only to get shot down at the close. Today the opposite happened. It is as if there is a tug-of-war happening.
The good thing about this action is it allows investors to witness some of the strong points of technical analysis first hand. If an equity is in pure bull or bear mode, and all indicators are pointing in the same direction, making a trading decision is easy. The real bread and butter comes in being able to read the market when the technicals seem to be unable to point strongly in any direction. The recent technical posts we have provided give investors an up front and personal view of exactly why there are people who look and rely so much on technicals.
Today Sirius XM rocketed up at the close to finish at $1.01. This close provided a more bullish situation from an EMA standpoint than yesterdays. Click Chart To Enlarge. The convergence of all of the moving averages is still in play with only a penny spread between the closing price and any one of the 5, 13, 20, or 50 day moving averages. One thing that I always like to do when considering any technical style is to seek confirmation from other technical items as well. If several technical indicators agree,then you can typically feel more comfortable in your decision. I like moving averages, support and resistance levels and volume. They are easy to obtain, and easy to remember when looking at an equity throughout the day, or when on the go.
As I have indicated, while the EMA's are getting more bullish, the volume has been a bit lighter than I would prefer, and the equity is having difficulty in moving past key resistance with any authority (on high volume).This would seem to indicate confusion, but when looking closer, we see the convergence of moving averages as a possible indicator of a new trend in the making. The most recent convergence periods were all followed by bullish runs.
Yesterday I noted that the equity would not likely spike up, but rather march its way up more methodically. That seems to be the indication that we are seeing happen. The $1.01 price point is still the key. What needs to happen to confirm a bullish run is for the equity to close above that point on volume. If the close is "painted", I would have less confidence in the move. Preferably I would like to see a close of $1.03 or $1.04 to gain confirmation.
Readers can stay tuned to articles on SiriusBuzz for more updates. In days where an article is not published, I will post updates in the Sirius Buzz forums SIRI stock section.
Position - Long Sirius XM Radio