Sonomax (SOMX) Trading Opportunity

Sonomax [SOMX:NSDQ] was a stock I had traded heavily a few weeks ago as it had a huge run. I made some mad cash, and wished I could have blogged about it, but the risk and volatility was something I did not want my readers and friends (who I've heard read it) to endure through. In fact, I bought it one more time for fun and it dropped hard on me. I still own it, but it looks like a buying opportunity has presented itself. Now that the volatility on the company has settled, we are getting to see some more stable trading, albeit 4 per cent swings in a day isn't traditionally stable. The stock bounced off $8 support two days ago, and has steadily climbed, also breaking out of a triangle or wedge formation. The streaming 6-month chart of Sonomax courtesy of BigCharts below shows this technical break out. Normally, a break upwards in a flag formation, like the one above, moves up equal to the length of the flagpole (or the initial spike). That is, the spike went from $4 to $10 in about a day. Now, normally this holds true and break outs will add another $6, but I think this is a different spike which won't gather as much momentum. It seems that $10 is heavy resistance, so I would consider to sell in the high $9 range. Consider watching the stock if you do not want to own a biopharm company with no revenue. This is purely a speculative play so do not put a lot of money into it. The company has not yet released its FDA-approved sleep aid pill into the market, but plans on getting them on the shelves in the future. The good thing about this stock is that it moves a lot in a day, so it is possible to buy it on a down day and immediately sell it the next day for a good profit.