I have been passively following the Sona Nanotech (CSE:SONA, OTC: SNANF) story for the last few months. I even spent a couple hours reviewing all of the company news releases since last year and perusing the company website. Hardly in-depth due diligence, however, I did learn a few things. Like most of us I have also closely followed the covid-19 story since January and I have read hundreds of news articles about vaccines and covid tests.
None of this qualifies me to offer a valuable opinion on whether or not SONA will receive FDA or Health Canada approval for its covid-19 rapid, antigen test. Obviously, it is this approval or non-approval which has the market's attention and any news on this matter could send SONA shares soaring higher, or tumbling lower.
What really interests me is SONA's current technical chart structure and how the share price has recently settled down near important support. Friday's closing price sits just above where SONA shares opened on the morning of July 3rd, following a trading halt related to the company's announcement of validation results for its covid-19 antigen test.
Technical analysis isn't a science of perfectly predicting the future (last I checked there is no school of market analysis that is capable of this), it is an art/science of effectively analyzing potential future scenarios, assigning probabilities to those scenarios, and assessing risk vs. reward.
I don't have a crystal ball, and neither do you.
Let's have a look at two potential technical interpretations of the SONA daily chart:
Is it like this?
SONA.CA (Daily)
Strong uptrend with bullish falling wedge (price near apex and volume drying up) forming near major support, and longer term uptrend remains intact. Price has held above the opening price following the big trading halt on the morning of July 3rd ($6.30) - this could be an important clue.
OR, is it like this?
SONA.CA (Daily)
A bearish head & shoulders top (H&S top) with price right at the neckline and at risk of breaking lower into a LARGE open gap dating back to early July.
We will only know which pattern was the 'correct' interpretation in hindsight. However, I like the recent low volume consolidation near support, and odds tend to fall in favor of the bigger picture trend, which in this case is HIGHER.
I will continue to follow the SONA story, but remember I have ZERO special insights into the company's fundamentals or the probability of receiving FDA approvals (please don't ask me questions about this stuff because I probably know less than 500 people on the SONA channel on CEO.ca). I am merely a market observer, biopharma/biotech/biomed novice, technical analyst, and trader that enjoys rolling the dice from time to time.
I took a tiny long position in SONA shares near the close on Friday and I may choose to buy more or sell these shares at any time without notice.
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