I was an early convert to satellite radio. In the '90s and early 2000s, I was a bit a of a road warrior driving up and down the East coast of the US and as far west as Texas on occasion. Having radio that allowed me to listen to the same station across many miles was a gift since terrestrial radio required constantly searching for new stations when one passed out of range of the current one being enjoyed.
My love for the product deepened in 2003 when I made 3x my money on an option trade in XM Radio [back when XM and SIRI were separate companies].
Needless to say, satellite radio has been good to me.
So when this chart popped up on one of my scans, I was intrigued.
SIRI's price recently broke through to the upside of the channel I like to watch [1st ellipse] and looks to be targeting the near term high [the second ellipse]. The stock was up 49% last week alone
Normally, I would suggest my followers drop down to a lower timeframe to look for a long entry. But first... a bit more expanded look.
In the chart above, you can see that price exploded up through the price action going back as far as 2016. I posted on SIRI several years ago [blue box] and there was a nice little bounce at the gold circle [bottom of the price range in the box]. So far, so good.
But then...
Pulling back even further, you can see that the current bounce is really just a drop in the proverbial bucket. It's true that stocks that have fallen like this can stage comebacks.
But more often than not, these "Fallen Angels" [stocks that were once Wall Street darlings, but have fallen out of favor], never see their previous highs again.
On balance, this is the kind of stock that I suggest folks pass on. This is especially true where there are plenty of stocks that are well structured and positioned to move higher.
It's true, you can make money on bounces like this... but over time, a strategy that looks to take advantage of counter structure moves isn't likely to prove profitable.
Hope it helps.
