Wednesday, September 1, 2010

SIRI May Be Getting Ready to Break Out

Sirius XM Radio Inc. (SIRI) may be ready to break out, if the general market breaks out higher. I don't know anything about the company or its fundamentals; from what I hear it is a POS to say it mildly.

But the daily chart is showing a symmetrical triangle pattern, which is a continuation pattern, and the previous trend was up, albeit erratic. A symmetrical triangle pattern seems to break in the direction of the general market. Resistance at the upper downward trendline, at about $1. Target would be the breakout point plus the height of the triangle = $1.42.

What I like about this recent pattern is that the erratic move of this stock since late last year has calmed down enough to form a constructive pattern. That usually precedes a big move.

Today Nasdaq had a follow-through day with a huge gain on a larger volume. Dow and S&P500, though the gain was significant, didn't have enough volume to qualify as a follow-through day. Maybe after the severe beating that the market took, bit stocks like SIRI may float to the surface rapidly. Just maybe.

But don't take my word for it. This is not an advice or recommendation. Do your own DD.

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