SIRI’s Sweet Seven-Day Swing
Back in late January, shares of Sirius Xm Radio (NASDAQ: SIRI) were going through their first significant pullback since climbing back into bull market territory at the beginning of the month. And like an all-star quarterback trying his first few throws after a major injury, there likely was plenty of tension, anxiety and flat-out doubt as to whether or not the comeback would be complete.
So far, so good, SIRI. Seven days after dropping to its second, consecutive, new, short-term low at the end of January, shares of Sirius Xm Radio have not only gained more than 7%, but have rallied to close at new, 6-month highs for the second time this year.
The pullback that set up SIRI’s most recent run to major, new highs, was an uneven one during which the stock closed lower for five out of eight trading days, setting new, short-term closing lows twice in the process. During that eight days, SIRI finished in technically oversold territory six times, meaning that even on the few days during that sell-off when the stock did manage to finish above its previous close, the rallies were so weak that SIRI remained oversold.
Even more noteworthy during this period were the “consider buying” ratings the stock earned for each of those six closes in oversold territory. For traders looking for opportunities to buy short-term weakness in a market that often seemed reluctant to pull back, the 9 out of 10 and even 10 out of 10 ratings in Sirius XM Radio at the end of January were difficult to ignore.
Seven days and seven percent to the upside later, where does SIRI stand? Sirius Xm Radio is scheduled to announce quarterly earnings on Thursday, and with the stock’s recent gains, SIRI is set to open Thursday morning at or near technically overbought territory. That said, SIRI has neutral ratings of 5 out of 10, and could trade higher over the next few days before becoming so overbought as to begin to attract sellers in sizable numbers.
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David Penn is Editor in Chief of TradingMarkets.com