Sirius Chart Banging Its Head On The $1.00 Mark (NASDAQ:SIRI)

By: Gino Lattarulo -

In a previous article I gave the opinion that Sirius XM Satellite Radio (NASDAQ:SIRI) was not too far from consistently remaining above the $ 1.00 mark.  I still believe this for a number of reasons:

• The most important reason is that auto sales are on the rise.  Recent data from the big boys like Ford (NYSE: F), Toyota (NYSE: TM), General Motors, Chrysler, and Honda (NYSE: HMC) show an increase of 19% in cars, 12% in trucks, and 26% in crossover vehicles over the same time period in 2009.
• Sirius continues to manage debt well and it is looking like Liberty Media (NASDAQ: LMDIA) will be increasing its stake soon.
• Content continues to become more robust.  The scope of entertainment extends to virtually any category you can think of. Come on now, listening to classic terrestrial AM radio shows from 60 years ago on the new standard of radio for the modern age?  How cool is that?  The irony is just beautiful.   Very recently Sirius has picked up MSNBC to add back to the list of financial channels.
• Continuous exposure from the Apps market through devices like Blackberry from Research In Motion (NASDAQ:RIMM) and of course the iPHONE from Apple (NASDAQ:AAPL).
• Internet Service Providers now have the ability to manage bandwidth to their advantage, which will potentially limit usage or charge a premium to web sites that use large amounts of data.  In other words, expect websites like Pandora and Slacker to start charging more premiums to their customers to offset the charges they will incur from sucking bandwidth like Dracula at a Red Cross convention.
• Finally, I am going to give a reason that has no merit whatsoever in determining the success of Sirius. I just flat out believe in the technology and the staying power of a radio service that I can access from any point in the country with no buffer issues.

Anyway, I haven’t told you anything earth shattering.  Sirius still faces stiff challenges ahead and there is also the dark cloud of the NASDAQ compliance rule (oh please…) to contend with, but these points do support what the chart is confirming.  When I wrote the article mentioned above, Siri was sitting at approximately .91 cents. Quote from the March Article: “The Weekly chart shows the price action steadily above the 13 week EMA and recently pushing through the 50 week EMA which provides strong support at .71 cents. Any bounce off of the 13 week or 20 week EMA would potentially be a good entry point.”  

We see from the current one year chart that the price action has found support at .78 cents before beginning to form the next swing point at .82 cents. If this weekly pattern remains in tact, we could see an apex of approximately $ 1.50 before the next retrace. That wouldn’t hurt my feelings a bit.

Broken record disclaimer: REMEMBER: Never take a trade unless you are willing to lose the entire amount you put on the table. It’s the market’s job to take your money so protect yourself.