9/06/2022
Ever watched a stock go from single digits to almost triple digits inside a year?
It’s a thing of beauty…
I remember buying Jumia Technologies (JMIA) under $9.00 before it ran to a high of $69.89 in under seven months.
The sad part is there must have been folks buying up there too…
…Friday’s close was $7.19.
One stock that’s had my attention over the last few months has shown similarities to the run mentioned above.
We’re on the daily chart, and a busy one at that…
Notice the rounding bottom?
If I’m looking ahead, this alone is a potential buy signal… But let’s look at what else we’ve got.
SONM is no stranger to Resistance.
The stock has been chained to a range between ~$0.50 and ~$0.80 with each attempt to break out being stuffed by end of day.
I’ve circled the level to break in white.
Now, from a price action perspective, here’s where things have changed: SONM has stair-stepped higher since the beginning of July…
Using Chris Hood’s MA Trading Tool the green column signals the first 8/13/21EMA stacking. In other words, the three EMAs have crossed over one another in a bullish fashion.
We also have two “Reversal Buy” signals as well…
Where’s the caveat?
The Stochastic on Chris Hood’s Squeeze Tool is red and pointing downward with the composite version of the tool — the Squeeze 4-Pack — echoing the same, but to a lesser degree.
Volume has edged lower with a couple of above-average buying days.
In favor of this is the fact that the Short Volume has steadily fallen since the last parabolic move (white dotted arrow). This is a sign that shorts may already have covered or are beginning to cover considering the price has moved higher.
As for a price target, I’d look to the gaps over to the left with the first target around ~$1.00 and a stretch target to ~$1.25.
If you’re buying here, I’d look to just under $0.68 as a stopping point.
Barring any dilution or adverse events, patience should pay on this one.
Keep moving,
(Disclosure: I hold no position in SONM, but intend to initiate a position in the next 30 days.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
