Technical analysis has proponents and opponents, but in the end, a lot of what happens in technical analysis boils down to a lesson in human nature. I have seen system after system. Each has its flaws, but typically human nature has enough constants to make technical analysis work.
Personally I am a fan of watching volume and comparing it to the given price. In addition, recent and historical activity should also get due consideration. With regard to Sirius XM, I have believe that if the equity can hold above .40, that it would have a good chance of making a run to .60. My reasoning is simple.
On its way down to the lows of .05, Sirius XM Radio spent very little time in the range between .40 and .50. Because there was not much activity in this range, it gives the equity freedom to run through it quickly again. Simply stated, there are not people eager to sell at these levels because they likely bought at a higher range. Equally as important is that in recent days, the equity has shown some strength, and those holding the stock typically will not want to sell if something looks to have promise. It is simply human nature.
Stock sites that offer technical analysis such as StockTA.com are giving Sirius XM Radio some very bullish indicators across a range of technical metrics for investors to consider. Even if you do not believe that technicals work, you should at least make it a point of learning about them. The reason is that there are many who trade on technicals, and because of that, technicals will indeed play a role in the market.
Another popular technical site is American Bulls. For their part, the last recommendation on Sirius XM was a sell on April 7th. Their system is calling for investors to wait at this point, noting that the bulls seem to be gaining steam, but that indicators are not quite right to buy. Investors who have followed American Bulls on Sirius XM over the past two years would have turned every $100 invested into $316. Not a bad return. While I have not used American Bulls for any trades in Sirius XM, I have tested the waters with other equities, and must admit that when I followed the system, I performed better than had I relied on my own instinct. I am not endorsing American Bulls as a be all and end all system, but am saying that it is a great tool that simplifies technical analysis and should be considered as one source (among many) of information regarding trading.
In the end, it is my belief that Sirius XM has potential to carry a nice upward trend to the .60 level. In my mind the downside risk is .35, and the upward reward is far greater. To be clear, I am not recommending that investors buy, sell, or hold at these levels. Each investor has a responsibility to conduct their own research, and each has their own unique circumstances to weigh into the mix.
Position: Long Sirius XM Radio (No affiliation with Stock TA or American Bulls)