Sirius XM Enters Danger Zone
A few weeks ago, with SIRI trading at $1.42, I wrote about a potential move to $1.57. I followed that with a new alert stating that the equity could take another run up to the mid $1.70’s. Both projections came to fruition, albeit a bit faster than I anticipated. My most recent take on SIRI was that auto numbers, news on Satellite Radio 2.0 from the Consumer Electronics Show (CES), and a subscriber number announcement confirming guidance should be enough to help Sirius XM hold the line and build all important support in the $1.60’s.
Only one out of the three pieces of news was released. Auto numbers for December were fantastic, and demonstrate that the auto sector could be on track for a positive 2011. The missing news is on the subscriber numbers and anything exciting about satellite radio from CES. Absent these nuggets of information the equity has started drifting downward. While it still remains in the $1.60’s, a dip down to $1.50 or so is quite possible and should be anticipated. This is especially true when you look at the options market and the number of $1.50 leap contracts in the hands of investors. As SIRI investors know, the options market expiration is only about 10 trading days away, and that market can impact this equity.
The technical indicators I watch were once quite bullish. Now I would say that they are weakening quickly as the stock price tumbles below the moving averages on moderate volume and as long as investors are ready, it should not be a big deal. Support at $1.50 is key. If Sirius XM can hold that line they can build a solid foundation there and let positive financial metrics tell the story in February we could see a decent run. If the company does deal out a little news on subscribers it could help build support in the $1.50’s.
Personally I see the equity drifting down a bit from current levels. Not the news readers want to hear, but it is how things look to me at the moment. It is always better to be prepared than to be surprised. Sirius XM has a lot of passionate people that see a lot of positives in SIRI. The trick is setting aside that emotion to grasp the sentiment of the market as a whole. SIRI will have its day, but it will take time.
Position – Long Sirius XM Radio
At $1.54 I am buying another 10k shares. The way I look at it is that I get a chance to add more shares cheaper, my strategy is to buy more every time the stock gains big and pulls back.
Position very long!
If one looks as I see it SIRI is forming a classic cup and handle formation and hitting these lows is nothing more then consolidation for the next leg up.
If the add 350,000 subs in the 4th quarter and guide to an additional 1.5 million for 2011 the stock will move.
I agree on the pullback theory. What I do get nervous about is when I look through the Best Buy sunday circulars and see pandora listed as included on all these blue-ray devices. With Howard,the NFL and other content available on a wide array of devices it would be great to see Sirius/XM’s symbol/tec. promoted as being available in the living room across America.
This has been explained several times by SIRI analysts including Spencer Osborne, How can Pandora compete with SIRI when it does not offer what SIRI offers such as Live Sports Radio, Talk Shows of famous celebrities…
Just like people say cash is king Content is also king! What Pandora offers is mediocre compared to SIRI. I strongly believe that SIRI does not have any real competition, and will be slandered at some point on all cars sold.
Hey, believe me I’m on team sirius/xm. I just want to see them being promoted on the latest devices for the living room and everywhere for that matter. The founder of pandora was on cnbc this past week at the ces in vegas and he sounded really confident about their business. I know that’s what he’s supposed to do. But come on, as investors, we’re convinced, don’t we want the rest of the public to join us in our passion for sirius/xm
Pandora is not a public company and no one knows if they are making any money, it attracts teenagers and those who like freebies. Also Pandora does not offer it’s service in Canada a 30 million plus market on the other hand SIRI is already well established in Canada. I am not worried about the mediocre competition I am worried about their depth.
I sure hope the price goes down again, so I can buy more. I could kick myself for not buying more at 5 cents, 15 cents, 20 cents, etc., when I had the chance.
I am not pumping the stock, I am just ventilating my regrets!
It would be stupid of me to hope that this stock increases in price before I buy more shares!!! Like many people, I have to wait until I get my paycheck!
Good luck longs….
Shorts….Please say something negative so the stock will drop in price to less than a dollar….PLEASE.
If you are long buy now because just like the $1 stock price seems like a distant memory even though the stock traded around there forever, today’s stock price will also be a distant memory by the end of this year and after 3 big rallies pushing the stock price to around $3.
I wish they would cut deals to stream on Xbox, Ps3 and Apple tv. I think this could have been done a long time ago and blunted the Pandora buzz. It’s always best to land the first punch in any fight. I think Sirius has dropped the ball when it comes to home streaming. 50 million of these boxes out there and we are on exactly ZERO.
the author tells of a run in the mid $1.70’s. umm….when did that happen???
That happened a little over a week ago with an intraday high of$ 1.74
Everyoine has forgotten about Aircraft….. XM is the only onboard weather, info for general aviation AC in the world…….everyone keep thinking streans and cars.
Technical indicators? Why do touts/bashers resort to these arithmetical predictions based on past performance? Just another belief system exploited by trading houses.