Russell Action Fizzles For SIRI But Technicals Still Intact
So what caused the pop to fizzle out? There will likely be many opinions on the matter, but the simple facts of supply and demand may hold the most water. Sirius XM is a highly liquid stock and in simple terms a couple of hundred million shares were scoffed up without much of a blip on the ticker. Sure everyone knew this huge buy was coming, but to have it happen with only a few cents swing is an indication that there were plenty of shares available to conduct the transaction.
While this disappointment is tough to swallow, the bullish technicals such as Exponential Moving Averages are still in tact. Additionally the already strong support just above $1.00 will now get even stronger. Sirius XM had moving averages converge last week, and the equity has been trending bullishly since with each moving average being higher than the next across the board. This is a very bullish indicator. The buying pressure is not over yet, and investors need to think about there strategy going forward. There are hundreds of “clone” and “mirror” funds that will now have to take their own positions in Sirius XM. This will be happening early next week. Sirius XM is currently trading at about $1.06 meaning some funds will be able to hop in cheaper than the Russell Index. Investors will need to still watch things closely as the dust settles by mid next week.
The Russell Index should give official word on exactly what Funds Sirius XM is in any time now. To date they have only officially stated the Russell 3,000 and Global Indexes. At a minimum SIRI will be in either the Russell 1,000 or 2,000 as well with most speculating that the equity will qualify for the 1,000.
Position – Long Sirius XM Radio
Spencer, once the dust settles down, do you think Russell inclusion will bring more stability to the stock?
Considering the fact that MMs were able to take SIRI down almost all the way to $1.00 so easily in the last couple of days (intraday), I’m not sure those support levels will hold. The short interest is up, too. If I remember correctly, many people including you (and I) have been expecting a pullback after the Russell popup. Since the popup didn’t happen, do you still expect a pullback? From 1.09 to 1.06 in AH, I guess it has started already…
Spencer,
I call bullshyt. Call it like it is- this is pure manipulation and control. Mel raises guidance on subs, june auto sales look great, 2011 auto projections are way ahead of expectations, and now the russell rebalance. All of this in the last 6 weeks and the price is down to flat.
Corruption is all I can say!!!
I can’t help but wonder the samething.
It’s disappointing that the shares needed to balance aren’t purchased during regular market hours. Part of me understands why the shares are traded after the close whereas the other part is frustated that the share price isn’t reflecting the demand that the purchase created.
Hopefully Monday the general market conditions improve giving SIRI a platform to move up.
Corruption happens throughout life in many ways. People oft complain that whatever equity they are in is being manipulated and held down. Ironically you never hear anyone complain about manipulation on a stock that is running up. Isn’t that a bit odd?
If we know that there is a certain level of corruption and/or manipulation in the market why don’t people just stay out of it. Some do, but others try to “outsmart” the system because they feel they can make money.
In the end it boiled down to supply and demand. There was enough supply and liquidity in the stock to keep the price in check
Spencer,
Not one bit. Many stocks are manipulated up and down but few are controlled. This stock is being controlled. Big Difference. Just have the BALLS to call it as it is. Siri has not even been given a fair shake to run.
The get rich quick squirmish is a thing of the past. We are in a slow growth period in the mkt & siri/xm will slowly ,but surely outperform. Wake up people and get used to it.
Dean,
It has nothing to do with a get rich quick, it has to do with fairness. The markets are crooked and controlled. It will never be a fair game for the average investor. The law of supply and demand does not work in the stock market. It comes down to wall street and mm’s. You are at their mercy- pure and simple.
Just calling a spade a spade.
I have never heard a good explanation of when the fund buys occurr. I thought it was over the next few days. If you are in for the long haul it may not matter. With all of the good news and fundamentals doesn’t it have to go up? Was today’s action stocking up by the MM’s in anticipation? With so little information available on this process you would think it has never happened before.
Other funds will buy according to the rules in their own established rules. If a funds rules state that they have one day to adjust, then the will adjust Monday. If the rules give them 5 days, then they can do it any time within 5 days. There are hundreds of funds that are tied to indexes in some way. Each fund has its own rules.
Remember that day, 7th of April when SIRI traded above 600m shares and no one could figure out why. Also how difficult it became after that day to drive siri prices below 95 cents. Someone had bought all those shares between 90-95 cents and had been hoarding them since. That was the russell spike. The mms were hoarding it only to distribute it to the funds today at 10 cents per share profits on an average. The good thing is these shares will also be off the market and we should be able to form another solid support between 1.3 to 1.06.
Interesting, but that would have been a $600 million risk. If SIRI had closed at $0.99 on May 28th, then there would have been no Russell inclusion. That is a pretty massive risk.
I think an MM with such deep pockets can easily keep it above $1.00.
April 7th was not the russell
You think that was Liberty?
well i bot at .96 a couple of weeks ago and sold at 1.05 around 4:15 EST and made pretty good gain. did i think i would make a lot more, YES, am i sad about NO. u dont go broke making a profit. so we now wait for the later in the week for news on cars and then earning in late july, then the STERN rumor mill in the fall. i think top at 1.5 and low no lower than 1 until the above move means something. then there will be inevitable rumors on liberty and pandora and this Never Ending Story keeps on churing out more chapters. we need real numbers now no more crzy speculation for the summer at least.
Sirius is a ‘watery stock’ with the current float, I now agree with an RS to greatly decrease the number of outstanding shares.
Also, Mel should PERSONALLY address Jim Cramers complaint regarding his recent ‘alleged’ subscription purchase and the DISASTEROUS outcome thereof !!!
It is precisely BAD PRESS of this nature that severly HURTS us at the consumer level, and as an Long Investor going on FIVE years now, Siriusly Disheartens Me !!!!!
What happenned to the strong base at 1.01 – 1.03 ?
Spencer,
What happenned to the technicals ? Bottom fell out again. Anyhow big upward reversal coming real soon ! We’re oversold and so is overall market.
We haven’t heard from Spencer in a week. Did he fall into a crevasse?
Yo Spencer, you out there?! Miss your great aricles!
I am back. Had some issues to deal with.