Why Struggling Sonos Stock Could Stage a Bounce Soon

The security hit a nearly two-year annual low today

Digital Content Manager
Sep 1, 2022 at 12:28 PM
facebook twitter linkedin


Since suffering a massive bear gap following its fiscal third-quarter earnings report, the shares of Sonos Inc (NASDAQ:SONO) have been on a downward spiral that's culminated in today's nearly two-year low of $14.76. However, there's reason to believe SONO could stage a bounce, based on a historically bullish signal flashing on the charts. 

According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, SONO's multi-year low also comes amid historically low implied volatility (IV) -- a bullish combination for SONO during the past five years. In fact, during this time period, there have been two other instances where the equity was trading within 2% of a 52-week low, while its Schaeffer's Volatility Index (SVI) sat at a relatively low annual percentile, as is the case with Sonos stock's SVI of 49%, which sits higher than just 26% of readings from the past year. 

One month after these signals, the security averaged a 13.5% pop. From its current perch, a similar move would put SONO just below the $17 region, and above recent pressure at the stock's 10-day moving average. 

sono sept 1

Short interest has begun to roll over, down 8.6% in the last two reporting periods, however, there's still plenty of bearishness to be unwound. The 10.64 million shares sold short make up 8.5% of the stock's available float, and would take nearly four days to cover at SONO's average daily pace of trading. 

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners