Sonos Needs to Turn Up the Volume on Some Bullish Traders

 | Aug 09, 2018 | 12:57 PM EDT
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Sonos (SONO) is a new issue that Jim Cramer talked about in his Mad Money show. In his "Know Your IPO" segment last night, Jim looked into last week's IPO to see if the company's stock is as good as its speakers. The company makes a family of wireless home speakers that can stream music and audio from pretty much any device or service. Let's look at the limited trading data that we do have to see if we can say something useful.

In this daily bar chart of SONO, below, we can see a first day rally and then a reversal on day two. Prices have drifted lower in quiet turnover or volume. This chart does not reveal much.

In this 15-minute bar chart of SONO, below, we drill down a little to see the intra-day price action. Prices moved up sharply and have drifted lower. There is some minor chart resistance in the $18.50-$20 area but prices were not there long so it is not going to provide much resistance. In the lower panel is the price momentum study which has yet to show a bullish divergence.

In the limited Point and Figure chart of SONO, below, I have added the volume at price overlay. We don't have a lot of information but we do have some volume in the $19-$20 area which generally matches the activity on the intra-day chart above.

Bottom line strategy: Having a strong opinion with limited data is not the best way to go, but I can say that if SONO can rally above and stay above $20 it should look better on the chart.

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