JR,Originally Posted by JR999
Its a long discussion on the why SIRI will do what its going to do. It has to do with the macro and things specific to SIRI (QE juiced multiple, NOLS, Tax impacts on current FCF, buyback, cap ex, debt, types of debt and the overall debt market). Its a many post conversation on how each of those impacted the stock price in the past and how they will impact the stock price in the future.
Mid term, the price is going to be impacted by positioning for the tracking stock split. The lows for this positioning are probably close to the 8/24 low. More down side in the next ~4 months from the 3.65 level. 3.65 won't go quietly as we are seeing now. The same sort of thing will occur @ the 3.35 level. The buyback will be used to defend that level. The thing you need to worry about is the rate they are using the revolver up with out a new issuance.
Short term, I actually had one more impulse up while were were above 3.65. This was an earnings move, but it required a good tape and some juice. We did not get that, so watch for three closes in a row below 3.65 as a confirmation that we are going to revisit the 8/24 lows sooner rather than later in the mid term thinking.
A lot of these targets change based on where you are when macro impacts take place. An example, say we are visiting the 8/24 low, we showed support and it seemed to hold it on a Friday. China does 5% devalue that Sunday night. We won't be holding the 8/24 low. That same sort of move by the PBOC when we are trying to hold 3.65 and I would say the 8/24 low would hold. Not saying that they will do a 5% devalue all at one time, they seem to want to stair step the devalue. But the gist of it is, the closer you are to support the more you are at risk of losing support due to the unforeseen. Know the levels, use the levels and it makes it much more profitable from a trade perspective.The same deal works going north too. We happen to be working with an impulse up and bumping against 3.95 and the FED back peddles and announces QE 4 ever, we are busting through.
Things are eating my free time to post these days, I'll try to hop in from time to time. But only if its constructive, I'd rather spend my effort making money than posting to clarify misunderstandings and misquotes , intentional or accidental.
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