Sonus Rally Overextended
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CONTRIBUTOR http://www.antandsons.com
Sonus Networks, Inc. (Nasdaq: SONS), a leading supplier of service provider Voice over IP (VoIP) infrastructure solutions, is rallying again today after Synergy Research Group released year-to-date results in a third quarter market share report entitled, "3Q06 Service Provider Worldwide VoIP Market Share Report," that shows Sonus with approximately 29% market share. Sonus shares are up by $.27, or 4.43%, to $6.37 on good volume. The stock is reacting positively to this news because the company has reaffirmed it is a market leader, again outpacing overall market growth as it did during the second quarter. But is that really new news? On Monday, a Piper Jaffray analyst upgraded shares of Sonus on the basis of the company's growing market share. With that being realized today, and the stock already up in anticipation of this news the past few days, it is curious why shares continue to rally.
On a technical basis, shares are up 16.8% since Friday's close of $5.45 and are treading into well overbought territory according to the relative strength index. Since bouncing off 200 day moving average support of $4.80 in early November, Sonus is up 34.1%. With upcoming light trading due to the Thanksgiving holiday, will the rally fizzle out as investors take profits and sell on the news?
http://www.antandsons.com
Sonus Networks, Inc. (Nasdaq: SONS), a leading supplier of service provider Voice over IP (VoIP) infrastructure solutions, is rallying again today after Synergy Research Group released year-to-date results in a third quarter market share report entitled, "3Q06 Service Provider Worldwide VoIP Market Share Report," that shows Sonus with approximately 29% market share. Sonus shares are up by $.27, or 4.43%, to $6.37 on good volume. The stock is reacting positively to this news because the company has reaffirmed it is a market leader, again outpacing overall market growth as it did during the second quarter. But is that really new news? On Monday, a Piper Jaffray analyst upgraded shares of Sonus on the basis of the company's growing market share. With that being realized today, and the stock already up in anticipation of this news the past few days, it is curious why shares continue to rally.
On a technical basis, shares are up 16.8% since Friday's close of $5.45 and are treading into well overbought territory according to the relative strength index. Since bouncing off 200 day moving average support of $4.80 in early November, Sonus is up 34.1%. With upcoming light trading due to the Thanksgiving holiday, will the rally fizzle out as investors take profits and sell on the news?
http://www.antandsons.com
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