Sirius XM traded as high as $1.06 today, but was taken down to $1.00 at the close. Even though the end of the day did not look pretty, the equity actually is demonstrating bullish signs from an Exponential Moving Average standpoint as well as a support and resistance perspective (although not as strong).
Over the weekend we wrote about the moving averages, how the numbers were all converging, and how the recent behavior of the stock upon convergence was a bullish run. Combining a bullish run with the Russell inclusion could be a nice opportunity for traders. The lone issue that could hamper momentum is options expiration scheduled for this Friday…the same day that the Russell will again update their list of additions and deletions from the index.
Currently Sirius XM has turned bullish on the 5 day and 13 day moving average. This means that the equity is exhibiting short term bullish signals. The 20 (medium term) and 50 (long term) day moving averages remain bearish, but these averages sit at only $0.01 above current levels. Should Sirius XM close green tomorrow, a medium term and longer term bullish trend will be confirmed. (Click Chart To Enlarge)
From a support and resistance standpoint the equity was able to pass through resistance at $1.01, but ultimately gave that up at the close, and fell below again. The resistance at $1.01 is very strong, and there is no real resistance above that until $1.10 is reached. It appears that the equity wants to push above the $1.01 range, but is not quite ready to make a more bullish run that will take it up to $1.10. It is most likely that the equity will step up slowly rather than spike in order to get beyond $1.10.
There is a lot happening, and caution should always be considered, but the trending seems to be bullish. It is now a question of timing.
Position – Long Sirius XM Radio