SiriusXM Closes Below $3.00

The bad news is that SiriusXM has closed below $3.00.  The good news is that it happened on light volume and the equity managed to stay above the support level of $2.95.  The equity is definitely challenged, but longer term the fundamentals are strong.  It presents an interesting dynamic for investors.  I would term this area as a decent accumulation or entry point.  In my opinion the downside risk is $2.85 or so, but the odds of getting down that low are not strong.  The upside potential is another test of $3.25.  Thus, in the near term the upside potential outweighs the downside. Volume The volume on this down day was lighter than normal.  The equity seems to be drifting down and technicals in the short term have gotten very bearish.  We have not seen big volume on this stock in quite some time.  What we want to watch for is the volume and action at $2.95.  If that support level breaks the possibility of a test of the 200 day EMA (between $2.80 and $2.85) becomes more real.  If $2.95 is broken on 50 million shares or more, the likelihood of drifting lower becomes more real. Support and Resistance The support and resistance is getting very interesting.  We now have two pretty big walls above.  One at $3.05 and another at $3.11.  The fact that there are now two walls above makes a trip to $3.25 more of a challenge.  I do however believe that the $3.05 level is not quite as strong as I have indicated.  It will gain strength for each day this equity stays below $3.05. Exponential Moving Averages We are all red.  The first hint of removing red can not happen unless this equity closes above $3.05.  What we want to watch for are the early signs of reversal.  If this equity can close above $3.05 it can make a decent run at $3.11 and then beyond.