Sirius XM Radio has been trading up slightly as various technical indicators have gone bullish. From an Exponential Moving Averages (EMA) standpoint Sirius XM has seen the 5, 13, 20, and 50 day moving averages all converge with a break out above those averages happening on Friday. While the EMA metrics have improved, the equity also passed above what was a wall of resistance at $1.01. By closing at $1.04 Sirius XM has effectively turned that wall of resistance into very strong support adding more to the bullish outlook.
With Sirius XM remaining on Russell's Preliminary list of additions last Friday, and gaining final inclusion on the Russell Indexes this coming Friday, the news and outlook for Sirius XM is more positive than ever. The only thing we are waiting to see now is for the volume to come into play. Heavier volume will be further confirmation of a bullish trend, and there will certainly be volume at the end of this week.
Sirius XM is on the cusp of what could be a nice bullish move during the next two weeks. The question that most have is how high the equity can go. There is a lot of liquidity in Sirius XM, and while most anticipate a run on the Russell inclusion, that impact will be absorbed in relatively short order. I would anticipate a spike on that news, and then a settlement down to what will establish the new trading range for Sirius XM. If you are playing the Russell, be prepared. That announcement comes after hours on Friday. Following the Russell spike, several "clone" and "mirror" funds will have to make their moves as well. When volume begins to dip after inclusion, it could be considered a signal of the new range. Investors should watch things closely.
This week and next can be very interesting for investors. Stay tuned to SiriusBuzz for all of the latest news and coverage surrounding satellite radio,
Position - Long Sirius XM Radio