SiriusXM closed down on lower than previous volume today. In one sense this shows a lack of strength in the downward move, but the caution is that in recent weeks the low point in volume has been about 30 million shares and that would be the point where we could determine a true bottom of the equity. For this reason we need to remain cautious of the downside potential.
The volume on this equity today, as stated above, was lower than average and lower than normal. This step down in volume could be followed by another step down tomorrow. If a second step down happens, it could signal a temporary bottom at about current levels of that point in time. In essence, if the volume is light tomorrow on a downward move, that move might be at a critical level of support at right around $3.00. If volume does not lighten up and the pressure is down, then we need to look at the next step down.
Pay close attention to volume at the $2.99 to $3.02 area. These support levels are quite tight and similar in strength. In my opinion, either can be tested and the impact identical. What you should focus on is the step below at $2.95. That may wind up being a critical area.
Support and Resistance
You will notice on the support and resistance charts I publish that I establish near term targets on the upside and downside. These targets adjust as needed with each report. On the 14th of March I established a near term downside target of $3.10. The equity indeed hit that level on 3-15. On 3-18 the near term target to the downside was established at $3.02. I have not moved down to $2.99 or $2.95 year, but we are quite close to having to move there. Pay close attention. The next resistance above is at $3.12, which gives us some room to make a move either way by about 5 cents. If we test lower we need to look at the next step down. If we move up we need to look at $3.12 and then $3.18.
Exponential Moving Averages - EMA's
The EMA's are still not pretty. We have now passed below the 5, 13, 20, and 50 day EMA's. The next EMA level is the 100 day and that rests at $2.95. In recent down turns the equity has indeed tested the 50 day average and moved upward from there. Will we test the 100 day average. Recent history says no, but I do not consider it outside the realm of possibility. This is right at a support level, so things could get interesting. The trick here? Watch for the bottom to form and then watch for a quick spike like we have been seeing. The spike can ruin it through 2 levels.