Happy Holidays to everyone. It is my sincere hope that you all had a wonderful Thanksgiving. This technical update is normally a SiriusBuzz Premium feature, but today's report is for the benefit of all readers.
Black Friday saw SiriusXM close at $2.78. With that close we saw the caution flags removed and the moving averages get to a point where they are on the cusp of removing yet another warning flag. The equity is shifting from bearish to neutral with a bias to being bullish. This does not mean that we can erase concerns to the lower levels. It simply means that they are not as big a worry as they were only a week ago.
In Wednesday's trading the equity painted a bad close. Friday was very good, but bear in mind that Black Friday trading is slim and volatile.
As expected, volume was very light. Only 18 million shares changed hands. That means that there was little strength in the upward move. It is still behaving like an equity consolidating. Not run up or no quick dips are in the cards just yet. Remember, the macro economic situation will play a role.
On a side note....I did make it a point to get out on Friday and assess the action at the mall and shopping centers. On a trip into WalMart at noon I saw that there were only 9 out of 27 registers operating! I was shocked. I actually got some paper towels and a few nicknacks and only spent about 10 minutes in line. Usually Black Friday would have every register running and bigger lines. At the mall, the police details, usually in the middle of the road directing traffic, were in their cars. Looking at the parking lot I saw many empty spots. Again....Not what I expected to see. I would estimate that either Black Friday is not what it used to be, or consumers are more hesitant to spend. We will have to see the reports in the next week.
Support and Resistance
The support and resistance chart has changed slightly. We have seen levels consolidate and now have strong support at $2.75 and $2.57. Resistance is moderately strong at $2.95. With the equity consolidating and the moving averages tight, investors should be ready for a move. To the downside we have $2.75 and then $2.57 as the major steps. To the upside we have $2.95. An interesting trading dynamic is evolving. The last few days have been bullish.
Watch the action at $2.75. If the equity can stay above that level it can consolidate and set up and easy run when the pop happens. If SiriusXM breaks down below $2.75, it will consolidate below and it will take all of the energy of a pop to break back above $2.75. The difference is a crest at $2.80 or a crest approaching $3.
Exponential Moving Averages - EMA's
The EMA's removed all caution flags with the close at $2.78. That is bullish in nature. The averages are tight, and a break will happen sooner rather than later. There is only 6 cents between averages. Notice that the 5 day is on the cusp of removing the last two warning flags. The equity is being bullish at the moment.
What we want to see is SiriusXM close above the $2.75 level. The represents both a support levels and where the 5, 13, and 20 day EMA's are. It is an important battleground from a technical standpoint. If SiriusXM can close above $2.75 it will serve to remove all of the warning flags. The volume will tell us the story of whether we are looking at more consolidation or we are setting up for a bold move. The heavier the volume the bolder the move. A close below $2.75 will keep the warning flags in check, and perhaps add caution flags. This battleground is more important and tight than many realize.
Do not ignore the support level at $2.57. Yes, the equity has a bullish bias, but we want to watch our backs. If that bias shifts to bearish then the $2.60's are in the cards. The upside needs to establish strength above $2.75.