The last time we looked at
was in early November.
At the time,
was signaling that it would most likely test the August 2009 highs of 78 cents. The thought at the time was that a break of that area on volume would take SIRI to $1.50 before it was done.
Since then, that test did take place and volume did expand. I've updated the charts and my thoughts remain the same -- $1.50 is the target still.
On the monthly chart we can see that the uptrend is now
as the previous swing point high was but it took place on lighter volume. The current month has shown a continuation of the bullish push and volume has expanded. This supports the notion that higher highs are still on the table even with the bullish suspect trend on this time frame.
The other item that is slightly hard to discern on this chart is why $1.50 is the target. The reason has to do with the fact that this bar was the bar at which SIRI attempted to get back into the higher range but failed. The higher range was the lows of 2007 (about $2.70).
The failure for price to get back into the higher range resulted in a fast push lower and that happened with volume. If you stop to think about the significance of this, the reason that area is now heavy resistance is quite clear -- there are multiple years of stock that were priced above these levels that are still waiting to be sold. That's a supply line and one that most likely will arrest any price advance in its tracks.
If we flip our view to the weekly chart, this picture confirms the thought of the $1.50 target area as achievable.
The trend here is suspect bullish as well since the break of the previous swing point high came with lighter volume. That tells us we will be back to test this breakout area sooner or later. It's the volume since then that makes it appear that later is the more likely scenario.
Finally, on the daily chart, we see floors being built on successively greater volume.
That is a good thing if you are long. Each run up sees volume swell, then lower volume consolidation for a short period before the next push. A trader can take advantage of these consolidation periods to get long. For example, the next long side trade would be to use the bar from the Feb. 17 low as your entry point trying to get in as near as you can (averaging in) to the low of that day. With the swing high bar from Feb. 2 as your supporting cast, you can put your stop under 88 cents and shoot for $1.50.
That's the way this one looks. Until next time, just keep trading the charts!
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At the time of publication, Little had no positions in the stock mentioned, though positions can change at any time.
L.A. Little, author, professional trader and money manager, writes daily on
, a free educational site for traders and investors. He has been featured in numerous publications and is the author of
His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.