We had a down day on low volume. It is quite possible that this equity has, at least for the short term, identified a bottom. The good news is that it appears that the $3.00 level has at least some psychological strength. Whether or not this level will hold is dependent on at least some confirmation today. What we want to see, at a minimum, is the volume stay low and the equity hold the line. A better situation would be a modest climb in both PPS and volume.
As stated, volume was lower. Some 31 million shares traded on Friday and this was down sharply from the previous session. Watch for the early action and on what volume it happens. The $3.05 level is key in that it is just below the 50 day EMA and right at support. Should $3.05 break we have a real possibility of testing the next support level at $2.99. The next EMA support is the 100 day EMA at about $2.90.
Support and resistance is perhaps one of the more important aspects of the analysis right now. Looking 1 stop below we see the possibility that SIRI will visit a level below $3.00 for the first time this year. One step above, we have $3.09. The resistance at $3.09 is quite modest. The real challenge sits at $3.15 or so. What we have setting up is a trading range just like we saw a few weeks ago with the mid teens as the proving grounds.
Getting above $3.09 will not be easy even though the strength there is weak. Once that level is taken out the equity will want to reset a bit and build enough energy and strength to pass $3.15. Watch the volume at all levels. My downside target of $2.90 is possible so have a strategy in place now.
The EMA's now exhibit 4 caution flags and two warning flags. The chart is worsening in the short term. A close a couple of cents below current levels could bring about another warning flag. At this point there is no more room for caution flags. It will take a close above $3.06 to remove one flag, and a close above $3.10 to remove another. The correction to all green will not be a fast one (i.e. one trading day) unless some big news breaks.
Pay attention to the downside and look for a modest move to the upside.