Bullish Signal For Sirius?
April 14, 2006
Satellite Standard Group (SSG) likes to look at various aspects ofinvesting, including technical analysis. Chart watchers have various strategies that they look to for direction, and even trade equities by. Today we took a look at the chart of Sirius Satellite Radio (symbolSIRI) and noticed that Sirius may be on the cusp of something that has been a bullish signal in the past. This piece looks into the 20 dayMoving Average (MA) in relationship to the 50 day Moving Average.
Currently the 20 day MA is at $5.11 and the 50 day MA is at $5.17.
In the past, whenever the 20 day MA crosses above the 50 day MA, Sirius has always responded with a nice run up in price per share. The 20 day MA has been below the 50 day MA since January, and the stock had been performing bearishly. Beginning in April the 20 day MA has been moving closer to the 50 day MA, and it now appears that a crossover could happen in the next several days. Looking back over the last couple of years, here were the last occurrences of this technical signal:
Mar 2004 - 20-day crossed the 50-day (moving up) at $2.95, within amonth Sirius peaked at over $4.
Sept 2004 - 20-day crossed the 50-day (moving up) at $2.50, three
months later the stock peaked over $9.
May 2005 -- 20-day crossed 50-day at $5.30, with 2 months stock at $7.49
Sept 2005 -- 20-day crossed 50-day at $6.60, within a few days it was at $7.61.
Nov 2005 -- 20-day crossed 50-day at $6.60, within a month it was at $7.98
Will the trend continue?????
We will see quite soon.
UPDATE: A reader submitted the following - In the continuing effort to provide insightful information please note the following additions to what was written earlier. If you look at the candle stick patterns on the weekly chart you can see that Sirius has a hammer formation which is typically the sign of a reversal pattern.
Sirius has had good follow though to the upside, with an increase involume. This occurred in the the week of March 13th.
The stock then went into a triangle pattern from which it broke out to the upside.
On the weekly chart we had a inside formation, relative to last week.( higher low and lower high ). Typically this is a continuation pattern. Going forward, in addition to what was posted earlier let's look at a fewmore indicators.
1. The MACD histogram is showing signs of going though the zero line on the charts.
2. The WM%R is currently at -60.0 this oscillate between -80 ( oversoldcondition) to -20 (overbought condition) once it has crossed over to the -79point it has risen into the over bought area. Typically in a steep line.
3. The RSI is currently at 42.3 doesnt get to oversold until 70 or better.
4. The STO (fast as well as the slow) are in their midrange. more upsideto go .
5. Lastly in addition to what was said earlier in regards to the movingaverages we have another event on the horizon and that is the golden cross (50 day MA crossing the 200 dayMA) technically that is a big one.
If you are looking for the charts refer to the stockcharts.com web site. The weekly chart is where all this info comes from. as all ways use your own DD and best judgement to make trading decision's.
Satellite Standard Group is not a Financial Advisor. SSG fully encourages reader to do their own research and to contact a Certified Financial Planner prior to making an investment decision.The link to this write up is
http://tinyurl.com/e5s3a4/14/2006 03:24:00 PM
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