SiriusXM backed off another new high, but I am not terribly worried about the move. All of this action...moving up to new high's and then backing off, is happening on lower than average volume. Yesterday I pointed out that there is a good argument for justifying these prices, but what we want to see is that these prices can be justified technically. That is where the consolidation I have been speaking of comes into play.
The perfect situation would be this week in consolidation mode and then a run up going into the call next week. Oh...By the way...SiriusXM is holding their Q2 conference call on Thursday the 25th of July. Can you say GREAT TIMING?
Here's the deal. We want to see the EMA's consolidate a bit. They are getting over extended. We want to see the 50 Day EMA get from $3.40 to about $3.45 and the 5 day to be at about $3.55. That would mean about 4 or 5 days of consolidation in the $3.50's. They key here is trying to hold the line at $3.50.
The strongest support below sits all the way down at $3.23. Everything between current prices and $3.23 is moderate support at best. Do you see why consolidation is important? It allows for a new strong support level to develop. A strong foundation is a better launch pad.
Support and Resistance
Exponential Moving Averages