While it seems to happen in the blink of an eye, if you look purely at the technicals there was warning signs. The good news is that the reversal will give the same hints in many ways. SiriusXM tumbled more than I would have thought but we do see that the $3.33 level carried importance. Obviously, with a $3.30 close the equity has tested below that critical level. The next level to watch is the support at $3.25 and the 100 day EMA at $3.18.
Before anything else we want to take a look at volume. The volume was higher than average, but lower than the previous day. To me that is a signal that the downward move has strength, but that the strength in the move is also fading. At this point the question is whether the bottom is at the strong support level of $3.25 or the 100 day EMA at $3.18. My gut tells me that $3.25 is the bottom, but the technicals tell me to pay attention to $3.18.
On the upside we now have resistance at $3.33, then $3.43. Both of these levels are not very strong. This sets up the potential for an easier run back up.
While I do not often write about the RSI, has now shifted from overbought to neutral. It is not quite yet oversold. There is definitely room for another step down. Once we see volume to the downside dry up this equity becomes a buy. Long term my target of $3.75 stands.
Support And Resistance
Exponential Moving Averages