Shares of Sirius XM Radio (NASDAQ - SIRI) have risen sharply over the past week, and with today's close have become very bullish from an Exponential Moving Average (EMA) standpoint. Not only has the equity gone very bullish on EMA's, but it has made these moves on above average volume, which is another technical indicator I like to follow. Simply stated, I see strength in the direction of a move when it happens on volume.
Exponential Moving Averages look at the historical average price of an equity over various periods of time and compare those averages to not only the current price, but against each other as well. In order to be bullish we like to see the current price above the 5 day moving average, the 5 day above the 10, the 10 above the 20, and the 20 above the 50. With today's close at $1.62 the 20 day moving average has risen above the 50 indicating a bullish pattern across the board.
Having broke through the $1.57 target I wrote about last week, there is now little resistance above. The issue at hand now is the trading volume today. The equity went down on light volume. This could be a sign that SIRI will try to consolidate and build a base here at $1.55 or above. Support at $1.53 is moderate in strength, while the next lower support level at $1.40 is very strong. The bullish EMA indicators make SIRI a very tempting play at this point. Sirius' Q4 is about to end and I would anticipate some positive subscriber news from the company in the next week or so. This could be enough to stave off the bears and allow SIRI to test newer highs.
In my last technical article I had said that those looking for $2.00 would need to be patient. I still feel that way. The next move up will likely take it into the mid $1.70's and could happen in the next two weeks if positive numbers from SIRI are released.
For right now there are several bullish indicators that investors will want to consider.
Position - Long Sirius XM Radio