SiriusXM Trading Predictably
SiriusXM is doing a lot of what I have been expecting. It trades in a tight range while some moving averages begin to tighten up. There is not a lot of swings for active traders, not a lot of dips for shorts, and not a lot of runs for longs. We have an equity in consolidation mode that is also coiling up with tighter averages. If you follow technicals closely, and read each day you will see that the key level of $3.15, which used to be at $3.10, is now creeping up to about $3.18. That is a bias upside. In essence the equity is in a three steps forward and two steps back mode. This builds a foundation. The strong support is at $3.10, while the strong resistance point is about $3.18.
Volume
I liked the action today because the company held the line on slightly above average volume. We do not like to see the equity a penny lower, but all things considered, we are dealing with a range here and not a fundamental slip or pop. I do not worry unless volume increases to the downside at $3.09. I do not get excited unless $3.18 is broken on at least 85 million shares. I am content with a methodical move that carries an upward bias.
Support and Resistance
A few key changes to note. The key level is now $3.18 and there is strength in that level. While the strength makes it harder to break, it will eventually become a strong support point. Seeing that strength move above $3.15 to $3.18 is actually a good dynamic. We still have a decent support level at $3.09 and a fall back support level that is quite strong at $3.01. In my opinion the equity becomes a buy on anything under $3.09. An active trader holding shares looking to sell may sell at $3.09 on a dip and wait for a bottom closer to $3.00. More likely than not this equity will continue to range trade though.
Exponential Moving Averages
The EMA’s still have a caution flag in play. In fact, a second one will come up with a close below $3.15 (the current trading level). Then again, a close above $3.16 will remove the flag that exists today. What I see happening is that the 5, 13, and 20 day averages will converge. The 50 day is trailing behind. The longer this equity trades between $3.15 and $3.20, the tighter all of these averages will get. Tight EMA’s usually mean a break. I feel the break will be upward but still pay attention to a dip below $3.10.
good article Spenc
i agree, also, the Virgin media deal and Sirius possibly penetrating that area someday, makes for interesting
speculation
Expansion is an interesting, compelling, yet very scary dynamic. The costs to expand are substantial, even if the company decides on an Internet only strategy. The intent has to be compelling enough to the listener base. By example, people in France like American music, but they also like French artists. The company would need to have many favors. English, German, French, Italian, Portuguese, Spanish, etc.
Even expanding into Latin America is a challenge. The Latin channels here are actually designed for bilingual “Americanized” Latinos. These channes would not fit the bill in Mexico City.
Europe also already has established players like Deezer. Expansion sounds exciting, but the up front costs would be a drain on Sirius XM that investors may not like.
understood, but Malone is very, very rich and wants as most very ,very rich people, to dominate, to be number one.( Malone vs Murdoch)
as for the stock holder? well as I stated before, makes for interesting speculation
but,, even the speculation can give the stock a boost ,if only for a short term
a savvy Siri investor, such as I, can make a nice profit
sorry for the dup..
i do not stutter lol
Lol…..
There will be a point where expansion is an option, but it will most likely be Internet driven rather than satellite.
People seem to think that the existing fleet can cover South America. That type of thinking is failed thinking.
The old Sirius birds are already on borrowed time, and they power down once the orbit gets to texas. If they were to remain powered up, the useful life left will be cut by 2/3. They operate 1/3 of the time now. In addition it would be utilizing the Sirius platform, something the company is trying to phase out.
Meaningful expansion means new car deals, new content deals, new licensing, marketing, and taking on an established system all over again. The costs to expand take away many of the benefits of scale. The Internet radio side is much easier and less expensive. Certainly the product ould be bundled with cable, but that was tried and filed here in the US.
I am not saying expansion will not happen, I just see it being far more modest than some like to speculate about.
Malone is looking to first get back the $1.7 billion he invested. He is then looking to sell back the balance of high cost basis shares while remaining above 50% for a spin. His power play is literally turning a $12,500 investment into $10 billion. Thus, the thought of Sirius XM spending money on expansion is on tarry to the current goals. In essence he wants any money spent to be going toward share buybacks, etc.
I enjoy the exchange but is it just us here? lol
Spencer
I am here in NJ getting some snow not a lot, so they so and so i jope they are right
not sure where you are but have a safe warm weekend
cya next week!
Paul….
I am in NYC. Getting the same stuff you are. If you are ever in the city let me know
Spencer
only an hour from the city, ty for the invite!
be good!
the waiting is driving me nuts, usually i am pretty much a day trader
talk next week