SIRI 3/4/2013 – Is Wave 1 Complete Yet?


An Elliott Wave update for Sirius XM Radio (SIRI).  SIRI appears to be still working on completing wave 1, as shown by its string of consecutive higher closes than the previous day on the next chart.  Has wave 1 completed yet?  It doesn’t appear that way, but it seems to be very close.

 

The first clue that wave 1 has almost completed is the decreasing volume as SIRI is making new daily highs.  This indicates that the buying pressure is drying up.

 

SIRI 2013-03-04

 

Then, based on the next chart (an hourly chart) SIRI has completed waves 1-4 and is working on the completion of wave 5.

 

SIRI elliot 2013-03-04

 

Notice the highest amount of volume through wave 3?  This helps to confirm the placement of the current waves (waves 1-4 on the hourly chart) as the heaviest volume is very typical of a wave 3.  The heaviest volume for SIRI falls right in the middle of wave 3 – this fits the elliot wave model perfectly.

 

The height of wave 1 of .13 as seen on the above hourly chart can be used to estimate the length of wave 5.  Since 2 of the 3 waves tend towards equality of time and price, I will use the more conservative estimate of .13 for wave 1 rather than the .15 length of wave 3, to calculate a price target for wave 5.  Using .13 from the length of wave 1 and adding that to the bottom of wave 4, or 3.12, calculates to a 3.25 price target for wave 5.

 

However, please be aware that if wave 5 is an extended wave, then a price target of the low 3.30′s is possible for the end of wave 5.  Once wave 5 has completed, a corrective wave (wave 2) will begin.  Corrective waves can take several forms.  However as noted on prior SIRI updates, the key number to watch is 2.97 (the bottom of wave 1) as wave 2 never goes below the bottom of wave 1, as noted here.  The next chart identifies the probable retracement area during the upcoming correction, or formation of wave 2.

 

SIRI elliot 2013-03-04a

 

 

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