I liked what I saw today. I actually appreciated the dip at the end of the day, as the volume was not high enough to hold $3.17 anyway. I would rather close up a couple of cents with volume edging up than try to carry a nickle on what equated to a hope and a prayer. This action is exactly what I was writing about yesterday. This is the type of behavior that is laying a stronger foundation brick by proverbial brick. Yes, we are still stuck in a range, but you can see that those on the sidelines are beginning to dip their toes in the water. Once that starts it can build. As long as the bias is bullish, it is a good thing!
Like I stated above, I like what I saw today. Volume moved up a bit from 30 million shares traded to 43 million shares. That is pretty much what I wanted to see. The next step is a trading day of 50 million shares, then 60 or 70 million going into the call. My opinion is that the street is starting to place bets. I look at the action today as a signal that there is going to be a willingness to take this equity over $3.20 and perhaps even $3.30 for the call. The call will determine how big the correction afterward will be or if a mini run can continue.
Support and Resistance
Support and resistance looks pretty good. There is strong support at $3.12 as well as the 13 day moving average at the same price for added protection The biggest thing I liked about today was that the equity was able to pass through the $3.15 price point even on light volume. This demonstrates that $3.15 is very vulnerable and passing it is not the massive hurdle that it has been in past attempts. The next resistance point is at $3.18 and while there is some strength there, the equity should be able to pass it. We could actually see that happen by Friday.
What we want to watch for on the downside is holding above $3.14 (the 5 day EMA). On the upside we want to see if it can pass $3.18 on at least decent volume. We could see a few runs at it and then see it taken down. That will leave $3.25 in the sights surrounding the conference call.
Exponential Moving Averages - EMA's
All signs are bullish with the EMA's even though the equity is sitting just above. The equity is coiled pretty tightly and we have the 5, 13, and 20 day EMA's all within 4 cents of each other. As written about previously the bias is bullish. In my opinion, unless there is a big SNAFU on the call, SiriusXM should set up for a small run.
Some caution is warranted to the downside, but I do not see a catastrophic dip in the cards. There is a lot of support points above $3.00 and at this point even the 50 day EMA is knocking on the door of $3.00. These are all signs that this equity could give us a decent pop. Do not look for a massive sustained run here. Slow and steady with small pops is quite fine and the most likely course right now.