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For a company that boasts of its 70 commercial-free music channels and Howard-Stern portal, Sirius XM Radio Inc (SIRI - 1.86) has been fairly quiet of late. It's been a while since we last visited the radio name, so I thought I'd check in and see what it's been doing.
Technically speaking, we may be seeing some interesting developments. The stock remains in a long-term uptrend that began in early 2009 after the shares bottomed out around a nickel per share. But little headway has been made in the past year, with the shares consolidating around the $2 level. SIRI recently put in an inverse head-and-shoulders pattern, however, which as Schaeffer's Senior Trading Analyst Bryan Sapp pointed out this morning can sometimes be indicative of key reversals.
The equity is also wrestling with its 80-week moving average, currently perched immediately overhead at the $1.92 level. This trendline offered unwavering support in October last year but is currently in danger of being violated as the stock is poised to close south of its 80-week for the fourth time in the past five weeks.
It's no wonder, then, why options trading has somewhat dried up on the stock. In late April, SIRI typically saw around 27,000 option contracts trade per day, almost 90% of which were on the call side. Volume trickled gradually lower through May and is now at 18,000 on any given day, with 60% on the call side. Some of this may be typical summer doldrums, but it also could speak to SIRI's lack of direction.
Schaeffer's put/call open interest ratio (SOIR) for SIRI stands at 0.20, indicating that calls expiring in the front three months outweigh puts by a margin of five-to-one. This reading, currently in the bottom one-third of the past year's data, will shift on Monday following the expiration of June options.
The bulk of SIRI's options activity has not been in the shorter-term series, however. The site of heaviest open interest is currently the January 2013 2-strike call, with 111,500 contracts, trailed by the January 2014 2-strike call, where 96,500 calls currently reside. The site of highest put open interest is the January 2013 3-strike put, home to 43,000 open contracts.
It will be interesting to see if and how the options crowd reacts, should SIRI make a definitive technical move in either direction.