Market Overview

Five Star Stock Watch: Sirius XM Holdings

Five Star Stock Watch: Sirius XM Holdings

The company: Sirius XM Holdings, Inc.

Ticker Symbol: (NASDAQ: SIRI)

Sector: Services   

Industry: Broadcasting - Radio

Sirius XM Holdings Inc. provides satellite radio services in the United States and Canada. The company creates and broadcasts commercial-free music; sports talk and live events; comedy; news; exclusive talk and entertainment; and the comprehensive Latin music, sports, and talk programming in radio. 

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Sirius also provides traffic, weather, data, and information services for subscribers in cars, trucks, RVs, boats, and aircraft through SiriusXM Traffic, SiriusXM Travel Link, NavTraffic, NavWeather, SiriusXM Aviation, SiriusXM Marine, Sirius Marine Weather, XMWX Aviation, and XMWX Marine. 

SIRI seems to have formed a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of Sirius below with added notations:


After rallying much higher this past year, SIRI has now created a key level of support at $3.55 (blue). That $3.55 level is also the “neckline” support for SIRI’s H&S reversal pattern. Above the neckline you will notice the H&S pattern itself (yellow). H&S patterns are reversal patterns, so the formation on SIRI woudl imply an impending break lower.

Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to break below its $3.55 support. 

Related: Five Star Stock Watch: Zynga

Sirius isn't set to release earningsicon1.png again until February, 2014.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

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