SIRI 7/22/2013 – Elliott Owes Me $4


Previously, I wrote about a short-term target of $4 for SIRI that I calculated using a Fibonacci Retracement tool.  Today, I am going to analyze in more detail just how and why SIrius XM Radio (SIRI) is heading for my $4 target.

 

SIRI appears to be forming an impulse wave to the upside as indicated on the below chart. This potential impulse wave would achieve my $4 short-term target I highlighted in my last SIRI update.

 

Sirius XM Radio (SIRI) and a $4 Short-Term Trading Target

 

The impulse wave calculates to a target range of approximately $3.93 – $3.97.

  • First calculate the length of Wave 1, which is $.43 ($3.47 – $3.04) and add the length of Wave 1 to the bottom of Wave 4.  Wave 4 at this time appears to be still in progress of forming, So I have estimated the bottom of Wave 4 at $3.50.  Remember, according to the Elliott Wave rules found here, Wave 4 cannot go into the price territory of Wave 1.  Therefore, using this rule, as well as a gap-up at $3.50 that I highlighted in my last SIRI update, the top of Wave 5 can be estimated to be $3.93 ($3.50 Wave 4 bottom plus $.43 Wave 1 length).
  • Next, similar to what we did with Wave 1, we will calculate the length of Wave 3.  Wave 3′s length calculates to be $.47 ($3.77 Wave 3 top – $3.30 Wave 3 bottom).  Adding the $.47 to the $3.50 estimated bottom used for Wave 4, and the target length for Wave 5 calculates to $3.97.

 

If SIRI’s Wave 4 was to only get to a low of approximately $3.60 rather than the $3.50 estimate that I used in the above calculations, you would then add the $.10 to the target prices to arrive at an updated range of $4.03 – $4.07.

 

The above Elliott Wave breakdown seems to confirm the $4 short-term target that was identified during the last SIRI update.  But the key item to remember and follow over the next few days, the share price cannot go below $3.47 before making a new 52 week high for the above Elliott Wave pattern to be a valid pattern.  If the $3.47 low is broken before new 52 week highs are made, then the potential Elliott wave pattern that is unfolding will need to be re-analyzed upon the break.  Also, a break of $3.47 means that SIRI is probably going even lower in the short-term.

 

Disclosure: I currently do not own any shares or interest in SIRI but I am looking to enter into a long position if SIRI were to pullback to the $3.50 area and hold that low before resuming an uptrend.

Comments are closed.

        
s2Member®