If you did not like the initial offer that Liberty media made, you may be full of questions now. SiriusXM, for the first time since the offer was announced, has closed below the initial offer. The equity closed at $3.67 on higher than average volume, but lower volume than the previous session. The current ratio offer stands at and even more underwhelming $3.42.
Longs are frustrated. The equity is essentially trapped and capped in a range that is not allowing upward momentum, and not allowing a downward move. Simply stated, we are ranging. Those that sold out at the highs were not "stupid" at all. In fact, they could now by back in and could have made 20 to 30 cents on the transactiuon without even changing the Liberty dynamic at all. In fact, a trader that exited SIRI to buy LMCA and was patient is even more to the better than those still sitting on the sidelines or sitting on their position. There could still be a good trade or swap in the cards, but it is a much tighter play now.
Going down on high volume is not good. Even if the volume was lighter than the previous session.
I have the short term downside risk at $3.63. If that breaks, we must then look at a possibility of $3.53. Something in my gut says that $3.63 should hold, but the dynamics at play now involve more than just SiriusXM. Som,e news could bolster Liberty and that would stabilize SIRI.
Support is at $3.63. Resistance is at $3.83. Welcome to our range.
The EMA's are giving up bullish tendencies, and leaning toward bearish ones. We are almost fully converged here. The action tomorrow is paramount. If this equity gives up just a few cents we will have caution flags across the board and be on the verge of warning flags. It takes a gutsy person to make a call here. The smart trader waits on confirmation.
We want to see strength in Liberty. It will not come from technicals. That means the news flow is the dictator now. Who knows what could be announced?
Support and Resistance
Exponential Moving Averages