SiriusXM reported the 2012 results today and there were essentially no surprises. The possible 4 or 5 cents I was looking for, due to the company guiding that there were more to come, appear to be gone. This wiped out 1.4 cents from my projection in one fell swoop. I have an article pending on Seeking Alpha that goes through all of that, so stay tuned there as well.
I actually liked the action today. The company took some lumps, maintained composure, and then closed up. While it was not a test of $3.25, it does help to build the foundation I have been telling you about.
Volume was higher than average and there seemed to be a bit of a testing of the waters happening with the upside bias seeming to win out. This is a positive and bodes well. When an equity trades on higher volume it helps to establish good support below. Consolidation may well be the next phase, and that consolidation builds support. Getting above $3.25 will be a bit of a challenge, but it will happen.
What we want to watch for is that volume normalizes to about 65 million shares. We want to see the equity hold $3.15 and build from there. A run up is not needed. What we need is a healthy and steady march.
Support and Resistance
There is no fundamental changes here. The levels that I have keyed in on for the past couple of weeks are still the key numbers. An active trader can certainly try to play the swings, but they are not very predictable these days. If you have the patience to pull a few pennies here and there I certainly think that it is doable.
The key levels I see are $3.15, $3.20 and on the outside track $3.25. There is a battleground here and when things tighten up a bit more we may see a more decisive move in the equity.
Exponential Moving Averages
The EMA's are all green and things look bullish. The recovery of the stock late in the day allowed this to happen. There is now pretty solid support above $3.00 across the board. That should give investors a sense of security.