When I see an equity down on low volume it typically tells me that investors are not running for the exits. Instead, the interest in the equity is minimal and that those that are in are are not selling while those that are not have not seen a catalysts to jump in. Therein is the consolidation we have been seeing. From here we could get action, but with the time of year we are in, I predict a pretty narrow trading range as the coil of consolidation tightens.
Yes, we broke below the 100 day moving average, so we need to keep our eye on the support level below, but the break through was on such minimal volume that my concern level is not high about the break...at least not at this point. From here we want to watch the volume and the action. I am leaning toward tomorrow being a test at $3.65 or so then a recovery on modest volume to about $3.71 or so.
We essentially have now seen a consolidation of support and resistance levels to a point that two distinct trading ranges can develop. The first is action between $3.60 and $3.70. The second is action between $3.70 and $3.80. In my opinion one of these two ranges will be the dominant player in the balance of this year. I am leaning toward the $3.70 to $3.80 range as being that player. The danger is a dip to $3.50 in the near term. The upside potential in the short term is a rise to about $3.85. That means you can be an active trader and grab nickels here or there, or simply stay in your position and await stronger technical or fundamental signals. From an RSI standpoint, SIRI sits at 45. This means that there is downside room before it is totally oversold, but that it is more oversold than overbought right now. Watch this equity closely.
In summary, SIRi is in a tight consolidation and coiling up. The EMA's are almost holding hands at this point with how close they are. This typically means a move in one direction or the other. I see that move as being a dime one way or the other, with a bias to the upside. We did ad a caution flag and a warning flag today, albeit on low volume.
Support and Resistance
Exponential Moving Averages