Well, the news flow of the day took its toll on the markets and SiriusXM was not immune. The equity broke below the 50 day EMA and we must now consider the 100 day EMA as the next backstop. It is something I have been warning about, so for members it should not be a surprise. While investors may attribute some of this drop to the Sound Exchange lawsuit, I do not feel that it was the driver.
Equities across the board took lumps today. The danger zone now is $3.50 and the 100 day EMA. We have a support level at $3.49 as well, so there is moderate protection there, but not a wall. Looking further ahead, the second stop on support levels would be $3.40. We have now spent too much time below $3.75 and it has allowed the strong resistance level to come down to $3.65 or so. For the moment $3.65 is the ceiling with $3.75 becoming the short term upside target. The mid term upside is now $3.85. The see-saw and tug-of-war looks to be wrapping up and this equity looks like it wants to drift down until the EMA's all tighten up.
The good news is that we should see that in the next week. The bad news is that we are a step back from where we want to be. Of course, we could wait on confirmation, but there are some pretty clear bearish signals in the near term. We now have caution flags across the board on the EMA's, and have added a third warning flag. Do not ignore these. What I see is a buying opportunity at anywhere below $3.60. The 100 day EMA should be strong enough to hold the line, but it will take some positive macro-economic news to allow the coiled spring to let loose. If the macro situation remains unsteady, then we do run the risk of drifting down. Now is the time to watch closely.
Support and Resistance
Exponential Moving Averages