The situation is not much different than we have been seeing lately. SiriusXM is trudging along and making small moves on low volume. As I have said many times, this equity is coiled, and while there is indeed downside risk, I see the upside potential being greater. This could well be a great phased entry point or a great place to add to positions. What we saw today was a small rise on low volume, BUT, the volume was higher than the previous session. A small victory was achieved today, but this action is not making anyone a ton of money.
28 million shares is hardly something to get excited about on a lateral move. It would be wonderful to see it after a high volume move up or down to confirm a top or a bottom. Unfortunately, that is not where we are currently sitting. We want volume to be pumped up. It will happen at some point in the short term. It is simply a question of when.
Support and Resistance
The good news is that SiriusXM seems to have mitigated a risk of a drop to the 200 day EMA at $2.80 to a certain extent. The bad news is that there is still a risk. Today I would assign a 30% risk that Sirius visits $2.80 and a 50% risk that it visits $2.95. On the flip side I would say there is a short term potential of 60% that this equity can make a test of the resistance level at $3.12 in the next few trading days. Essentially I see a bit more consolidation between $3.02 and $3.12.
Exponential Moving Averages
In one day we managed to remove a caution flag and a warning flag. That is demonstrating upside potential. The real test now is whether we can manage to remove another caution and another warning flag in tomorrows session. If we do, it would indicate a shift to a short term bullishness not yet reflected in the EMA chart. This is why seeing these charts on a regular basis is helpful to traders. It would take a close of about $3.12 to remove another warning flag, while only $3.09 is needed to remove two more caution flags. If you look at the EMA chart closely you will note that $3.09 is a critical level in setting up an event move up or down. SiriusXM is slowing crossing through moving averages, and if it can climb over the 5, 13, 20, and 50, it could set things up nicely for the conference call.