The bulls are starting to go into orbit. Here are my thoughts on Sirius XM (SIRI) (June 03, 2014)
I want to look at Sirius ( NASDAQ:SIRI ). The weekly chart shows that this had been in a really nice uptrend, now it’s been in a not so nice downtrend. But the way I’m looking at this, this stock is showing signs that this has been a bottom. What’s been particularly encouraging to me is this was a high volume move here, followed by a high volume pull back, but the stock didn’t close at the low of the day, it actually closed essentially right in the middle of the day and now the stock is moving higher again. So this little event here doesn’t seem like much, but a lot of times the best trades come from not much. This little event is indicative to me of an even balance between the bulls and the bears and that is not what you see on a stock that’s ultimately going lower, particularly after it’s already had it’s head handed to it for how long here.
So I’m looking at this as actually a pretty good buying opportunity; to define you’re risk you could draw a trendline up here, however you want to do it, you could even set a 10 percent stop and if the stock starts trading a little bit below $3.00, let’s say 2.97, if the stock trades at 2.97 you’ve lost 33 cents, but I think Sirius ( NASDAQ:SIRI ) is giving you an opportunity to buy right now. And then if the stock does start to move up to the 200-day moving average, guess what, I don’t think it matters; it hasn’t really been relevant here. I would look at a more significant resistance level here at maybe 3.64, that’s about 10 percent from where it is now. But I think this is a pretty good time for you to start building a least a small position in Sirius ( NASDAQ:SIRI ), because I think it’s done going down.
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