XM Satellite Radio Chart Analysis
Taking a break from the Stock Trading Contest, I found XM Satellite Radio (XMSR) who just recently announced to be merging with Sirius (SIRI) if the deal goes through to be in a interesting technical situation. If you look at a chart of the stock below you will see what I mean, but bottom line, the forecast is pretty foggy.
When looking at this chart of XMSR, the main technical factors to take into consideration are:
- The moving averages which the stock is below all three shown here (the 20, 50, and 200). This is bearish as these lines are all resistance for the stock to break through if it wants to move up.
- The $13 support line is the key to this whole stock right now speaking on a technical note. If $13 support fails and the stock closes on heavy volume below it, it could mean another down leg to come.
Let’s now take a look at the chart of XM Satellite Radio (XMSR):
You can see the $13 support line pretty clearly, and how the stock has not been able to stay above its moving averages. We are talking short term here, but I would not be buying into XMSR if $13 falls. Now, if you are a long term holder and are looking 6 months to a year down the road once the two merge (if not later), then forget this analysis. But, if you are a short term trader looking to make some money, you can short with the collapse below $13, or buy here looking for $13 to hold up. I look forward to watching the stock over the next few weeks.
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This will be an interesting turn of events…it already has been. This merger should be approved no matter what. If it gets turned down, say goodbye to one of them anyway.
[...] XMSR [...]
Heh..I can’t believe this actually…a year later and the merger still hasn’t gone through. I think it’s the longest taking merger in history as of right now..