Getting a Jump On the SONO Rally

Back on Sep 16, Mike Paulenoff told MPTrader members that Sonos (SONO), the under-the-radar, work-at-home speaker company, had triggered initial buy signals.

Mike explained that the stock, which was trading at 14.35/36 at the time, had climbed above its up-turning 10 and 17 DMAs, in route to a challenge of the "flattish" 50 DMA, now at 14.75.

He wrote: "The recent low at 12.40 on 9/04 represents an exact 50% retracement of the major upleg from the March low at 6.58 to the July high at 17.83, and as such, the sharp upturn from 12.40 to 14.36 during the past week or so, is a technical signal that a correction within an otherwise bull phase is complete."

SONO went on to reach a high of 16.10 this past week, up 12% from Mike's Sep 16 alert, and on Wednesday Sep 30, Mike wrote:

"SONO has popped above its flattening 50 DMA (14.56) today, extending the rally off of the 9/04 corrective low at 12.40. The longer SONO remains above 14.56, the more likely it accelerates towards 17.00 next, in route to a full-fledged test of the 7/23 high at 17.83."

See the SONO chart below.

From a macro perspective, with Covid again rearing its ugly head in a very public way, directly impacting the Trump Administration, SONO could also benefit from another round of stay-at-home spending and "Covid stocks" generally attract another wave of investor interest.

Join Mike and his MPTrader community as they monitor SONO in the days and weeks ahead.

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