SONO recently found support at its Feb. 11 bull gap level
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Household electronics staple Sonos (NASDAQ:SONO) stock has found recent support at its Feb. 11 bull gap level. There's additional technical support in place at SONO's 160-day moving average, as well as the +50% year-to-date level. Sonos stock broke out above a trendline connecting lower highs since its April peak, and has been recently retesting this breakout zone, which held above its previous post-earnings reaction candle back in May. While the tech sector has churned for most of 2021, a small cap like SONO could benefit from the more recent rotation back into tech names.
For a stock up nearly 42% in 2021, its noteworthy that three of the seven analysts in coverage of SONO maintain tepid "hold" ratings. This indicates there's ample room aboard the bullish bandwagon.
Meanwhile, short interest on Sonos stock is near record high levels, and the bulk of the short activity has occurred between $23 and $30. With short interest declining by 10% in the most recent reporting period and yet a healthy 5.8% of SONO's total available float is still sold short, there's decent potential for a short squeeze going forward.
Options traders have also taken a bearish stance on Sonos stock. At the ISE/CBOE/PHLX SONO sports a 50-day put/call volume ratio that stands higher than 98% of all readings from the past year. An unwinding of these bearish bets could fuel more upside for SONO.