SiriusXM’s behavior is in consolidation mode while at the same time testing the waters down below.  As I stated in previous updates, this is not something to really worry about, as consolidation is healthy.  What we have now is confirmation that the equity has had at least a short term crest at $2.75 and is testing lower support.  This could be an indication of some sideways trading with small dips and pops within the range.  In my opinion the market is still anticipating news, and people are hesitant to hop off to the sidelines if they are already in and hesitant to hop in if they are on the sidelines.  New will provide the impedes for movement up.  Lack of news will provide the drifting lower.

Volume

The volume on SiriusXM was higher than yesterday, but still lower than average.  That spells consolidation and if the equity stays in a narrow range starts to coil the proverbial spring again.  The market now has a three day break, so it will be interesting to see what happens when it opens back up.  Tuesday or Wednesday may be an opportune time for Mel to pop some news prior to the Liberty event.  Bear that in mind, as it would carry a positive impact on an equity that still wants to stretch a bit and has more room to do so.

What we want to see for SiriusXM to hold the line at $2.67 or better is volume of about 50 million shares.  Dipping lower on anything under 55 million shares is quite fine, and not a scary prospect.  This is especially true if it drifts down and volume dries up as it happens.  In order to break $2.75 we need to see at least 75 million shares.  Hopefully you can see why these consolidation periods are healthy.  It allows for less volume to make an upward move and have that move still be real.

Support and Resistance

The support level at $2.66 has moved up to $2.67.  It is still a weak level and that is why we want to keep $2.60 on our radar.  As stated, we seem to have confirmation of consolidation.  That puts SiriusXM in a trading range.  The narrow range is $2.67 to $2.73.  The wider range is $2.60 to $2.75.  Even though some consolidation is healthy, the longer it goes on fo the more likely that it will drift down.  The fuel for the rise is news, so the company needs to be pretty good about timing.

We want to watch closely at $2.67, and closely at anything above $2.73.  These are the key levels, but if I had to call out a priority it would be watching at $2.67.  Remember also that there is a gap at $2.58.  If we do not hear anything by Wednesday on the news front, I suspect the equity will want to drift down just a bit.  It will not be too much though, because Mel will be speaking.  Mel’s speech could provide a catalyst for the stock.

Exponential Moving Averages – EMA’s

While the action today was pretty neutral as far as the EMA’s go, it did serve to pull up most averages by a penny.  The higher these successive averages go, the higher the support below moves.  This is a good dynamic.  Notice that the 50 day average is at $2.46.  That is 11 cents higher than the $2.35 when SiriusXM took a dip recently.  Things are still quite positive.

What we want to see is the company get a close of at least $2.69.  If SiriusXM can do that it will continue to move the 20 and 50 day EMA’s upward.  A close at $2.73 or better will give even more breathing room.  As stated, it all hinges on news.

Summary

Watch for news.  It could propel this equity to break through $2.75.  A lack of news could see this equity drifting lower. Things look pretty safe at the moment.