It was almost exactly what I was looking for and called. Almost. The only missing ingredient is the volume. Seeing the move up is great, but having it happen on volume would have been fantastic. What this means is that we still need to be cautious of the downside, while we can remain enthusiastic about the upside potential. Simply stated, earning should propel this stock as long the company meets or exceeds all expectations. If they are able to boost any guidance we could see a better story. Today my short term upside target was realized. This causes a decision point for active traders. Instead of cashing in on the 10 cents I am letting it ride. My new short term target is $3.18. I have also moved up the downside short term target to $3.05.
The good news is that we got more volume. The bad news is that it was not as high as we would want to see. Essentially we are seeing a pre-call run-up on moderately light volume. It is not the best, but hey...we will take it. This is where savvy traders make money. There is a play here, or at least a possible one. If Sirius XM does indeed run between now and the call, but does so on less than high volume, it could work back down to a support level afterword. The exception here is news that drives the stock on real high volume. Simply stated, we should be looking at upward moves that can make a trader money followed by a point where a sale can be made to take profits, or the upward trend continues.
Support and Resistance
Support and Resistance had some action today. The resistance at $3.05 and $3.10 were taken out. The equity closed at $3.11. The risk here is that this move happened on lower than desired volume. However, there is substantial support at $3.10 and $3.05. There is plenty of room between current levels and $3.18. Adding to the excitement is that the resistance strength at $3.18 is not strong at all. Strap in and get ready for a move...At least in my opinion.
Exponential Moving Average
Good news on this front as well. All warning flags have vanished. We even have one warning flag gone. Do you see how fast things can shift when the EMA's are so tight. If this equity stays above $3.11 we can expect another warning flag to disappear. Stay tuned....there is a bull getting ready to let loose.