A TSC member request came through Sirius XM Holdings (SIRI). Specifically on SIRI & its $5.50 pivot area I mentioned in the Idea Chamber. I stated the this $5.50 area was an important area to monitor.

A stocks share price tends to use pivot areas to gauge supply and demand. The resulting breakout or breakdown is a result of the activity around the pivot area.

When a stock sticks around a pivot area, it is going through a consolidation period. That is what seems to be happening with the share price for SIRI at the time. But let’s review some charts since there is more activity to review than short interest totals that I discussed in the previous update for SIRI.

“Quick Hits 8/28/2017 – IAG & SIRI”

SIRI & Its $5.50 Pivot Area

This first chart for Sirius XM Holdings (SIRI)  is a 3 year weekly candlestick chart that illustrates the $5.50 pivot area. SIRI’s share price has been trying to keep its closing share price for the week above this pivot area.

On a break below the $5.50 area, then look for SIRI to find support at its main supporting trendline for its uptrend.

SIRI’s share price has spent more than 3 months around this pivot area[s2If !current_user_can(access_s2member_level1)]……

If you want to continue reading this article for Sirius XM Holdings (SIRI), you must first login.

I review support areas for SIRI’s share price in case of a drop below the $5.50 area develops.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)]. The MACD Histogram is showing selling momentum that has been increasing the last several weeks.

Based on a combination of the bearish candlestick warnings and the selling momentum for the MACD Histogram, SIRI does appear poised for a pullback to its main supporting trendline. Purchasing shares at this trendline should continue to pay off over the long-term, regardless of the wave pattern or the like.

Wait for the MACD Histogram to show 2 weeks of selling momentum that is decreasing before purchasing though. If at that time SIRI’s share price is at the supporting trendline, the purchases are warranted. While I do not anticipate a break below SIRI’s main supporting trendline, I do always want TSC members to be prepared for any sort of chart action.

SIRI – P&F Charts

Both the high/low and the closing P&F charts for SIRI reflect a bullish price objective of $8.25. I’ve only included one of the charts since they both reflect the same targets.

If you do not have a bookmark set yet for StockCharts.com, then consider adding one to access their free use of Point & Figure charts. That is not a paid plug. It’s actually one of the only sites where I’ve seen it for free though.

SIRI – Moving Averages

This last chart for SIRI is a 1 year daily candlestick chart to analyze its share price activity from a Moving Average perspective. I left a note on the chart which was from a previous SIRI update.

What does the share price activity look like when set agains the backdrop of moving averages? Sometimes the results can speak volumes. Let’s see how loud the decibels are for SIRI:

It is never a good thing to break below the 50 Day moving average during an uptrend. A break below the 20 Day occurs often, but as an investor you typically want reversals to happen above the 50 Day moving average. A break below the 50 Day could be indicating a longer consolidation period for SIRI as well as a possible trip to the 200 Day moving average.

SIRI & Its $5.50 Pivot Area – Summary

Between the combination of SIRI’s main supporting trendline and the 200 Day moving average, continue to feel confident reloading shares at or near the trendline. But because of the break below the 50 Day moving average and the bearish candlestick patterns noted above, use patience when scaling into your position.

It’s All About The Trend…..

Use this possible consolidation period to reload on lots of shares that were sold from your core position. If you are trading SIRI, buy below $5.50 and sell above it as a general rule.

While the selling of shares by Berkshire seems to have started a consolidation for SIRI’s share price, the trend remains up. But in order for the next significant move to take place, a continued consolidation may occur to try and remove any sellers. If you can’t stand sitting through a possible continued consolidation, then consider selling some shares above the $5.50 pivot area until SIRI confirms that its uptrend has resumed.

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