Is the Short Squeeze Running Out of Steam in Sirius XM (SIRI) Stock?


  • Sirius XM (SIRI) stock is in focus after shares surged roughly 50% last week but have now fallen about 35% from last week’s high.
  • The stock exploded higher last week, climbing about 67% at the high and ended the week higher by 49%.
  • However, it’s been riding a three-day losing streak, down about 35% in that span.
SIRI stock - Is the Short Squeeze Running Out of Steam in Sirius XM (SIRI) Stock?

Source: Shutterstock

If you’ve forgotten about Sirius XM Holdings (NASDAQ:SIRI) over the years, don’t beat yourself up. This name used to get a lot of traction in 2005 to 2006 and then again between 2013 and 2017. However, SIRI stock hasn’t been in the news much since. Until recently.

It had a sharp, albeit brief rally to all-time highs in January 2021 during the meme-stock explosion, but the rally lasted only a few hours. The stock has only eclipsed the $7.50-plus area a few times over the years, and January 2021 was the last time it did so until last week.

Shares have rallied in seven out of the last nine weeks, climbing 130% in that span. It was capped off by last week’s 49% surge. That’s as momentum traders and investors have caught wind of the stock’s short-squeeze potential.

As of the most recently available data, SIRI stock has almost 34% of its float sold short.

While many shorts may have likely been forced to cover amid that rally, remaining bears are feeling the heat. The stock has already more than doubled from the recent low. Further, shares came within 19 cents of the prior all-time high up at $8.14. If SIRI can maintain momentum, that figure isn’t all that far.

But Is SIRI Stock Running Out of Momentum?

Daily chart of SIRI stock.
Click to Enlarge
Source: Chart courtesy of TradingView

Despite the torrid run, bulls are worried that SIRI stock may be running out of momentum. Specifically, shares are down about 15% today. However, that’s simply an extension of the current correction.

Had Sirius ended last week on its highs, the stock would have gained more than 67%. Because it wavered on Friday though, those gains fell to “just” 49%. Now the stock is riding a three-day correction, with shares currently down 35% from the recent high.

This correction has many investors wondering if the run is over. That’s even as the stock pulls back to its short-term moving averages and the 61.8% retracement of the current rally. Can it find its footing?

That’s what momentum traders are looking to see now. Unfortunately, wild and volatile trading swings can cut both ways. It’s hard to know when a stock has truly lost its way. Is this simply a long pause that will refresh or is the momentum truly gone?

SIRI stock is the worst-performing Nasdaq-100 name on the day, and a number of analysts have now downgraded the stock.

While the stock recently enjoyed its best trading day in quite some time — and was halted amid the rally — it’s now getting doused in reality. If the stock regains its footing, bulls will look to ramp it back up to the recent high. Even though that’s more than 50% above current levels, that will likely be the target.

Otherwise, it’s possible that this one has run its course.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Article printed from InvestorPlace Media,

©2023 InvestorPlace Media, LLC