By: Gino Lattarulo
Do we have a hallelujah on Sirius XM Radio (NASDAQ:SIRI) staying above the $1.00 mark yet? I think it may be time.
There have been a lot of questions and speculation on why Sirius XM dropped after such a good earnings report. I read articles that the report was not good enough, there was manipulation, etc. Same old Same old. I like to keep things simple. In my humble reality (which is fairly dizzy) the stock was simply overbought. How many times have you seen a stock that was overbought blow away earnings only to watch it plummet? Conversely we have seen oversold stocks stink up the joint with their earnings report only to see the price action rise. SIRI is acting exactly the same as it usually has during the course of the last year after posting earnings, which is to fall about 25% to support no matter what the earnings report states and then rise to the next resistance level. So yes, it would seem that yet again it was all priced in leading up to the report. I have no problem with that. Any consistent pattern of price action is always a good reference point. We see on the current weekly chart that it did drop immediately after earnings and has still managed to buoy itself to the predicted $1.00 support level even after the meltdown on Thursday and the dramatic tech sector sell off on Friday due to the Apple (NASDAQ:AAPL) lawsuit. Referring to a previous article on the weekly support and resistance of Sirius, we can now see that the current resistance swing point is potentially at $1.25 instead of the projected $ 1.50 range. I’m still not completely convinced of this resistance point but it certainly is looking like it will play out that way. The stock continues to ride the 20 EMA nicely but any close below that could cause a short term breakdown to the next support level at the $ .80 cent range.
One thing I find interesting in this chart is that the price action almost indicates that it may be set for a consolidation before the next move but it is too soon to tell. All in all, the most important issue with this stock is that a reverse split is off the table. More importantly we have an economy that (albeit slowly) is healing itself. Unless something catastrophic happens I think SIRI will make a lot of people very wealthy in a few years time.
To be continued. This week will provide a better view of how the price action will potentially play out but for now it looks as if the chart is continuing on a pattern of positive consistency. I wish I could say the same for the morons who allowed high speed trading algorithms to control 60% of the market.
For up to date financial news, technical analysis, and forum discussions for all investments and trades, visit www.kingofalltrades.com.
