At this point, assume ammonia is high as it could also be a false reading. Tomorrow, take a water sample to a Trusted LFS and have them test your ammonia-ph-nitrate to verify your readings.
Perform a large water change (about 25%) and add a vitamin admixture directly to their water such as Selcon. Red bumps can be external parasite or as Jay indicated . . . Petechia which is often treated well with Formalin bath. Ruby Rally Pro would be very safe.
Is shark feeding ?
Just posted last week for another shark owner, this may help you understand your shark:
The bamboo shark (also sometimes called a cat shark) is a beautiful animal that is a common pet for aquarium hobbyists due to its comparatively small size of about 40 inches. They are relatively easy to keep, once an aquarium has been prepared for them. Bamboo sharks are bottom dwellers and will rarely come up to the top of the tank. Therefore, if you are trying to choose between differently shaped tanks of similar size, choose the one with the largest bottom surface area. This will give your shark plenty of room to swim around. Round or hexagonal tanks are best, as the corners of a rectangular tank will restrict the shark's swimming motion.
Sharks are carnivorous creatures that eat a lot and produce a lot of waste. It is important to have an effective filtration system to keep the water clean. Both an aquarium carbon filter and a protein skimmer are recommended. Like any aquatic animal, it's also important to keep the water temperature comfortable for your shark. A temperature of 78-80 degrees Fahrenheit is ideal for bamboo sharks.
Your bamboo shark will eat foods such as uncooked shrimp, scallops, mussels, and pieces of fresh marine fish, squid or octopus. Cut any large food into bite-sized pieces. Do not feed your shark common feeder fish such as goldfish or guppies which can have disease. These freshwater fish are not a natural food for bamboo sharks. If you wish to feed your shark live food, use silversides or sand eels. Bamboo sharks only need to be fed every two or three days. Give the shark a large portion of food a few times a week. If it loses weight, increase feeding. A juvenile shark should grow, but if an adult shark shows signs of weight gain, reduce the amount of food. When you first feed your shark, it may be hesitant to eat. Providing live food such as saltwater feeder shrimp and fresh cockle (in the shell) may help entice it to eat. If it takes a few days to start eating, don't be alarmed. These sharks can survive a few weeks without eating.
Last thing to know. . . A clean aquarium is important to keep your shark healthy. Clean/replace the filters often, and change the water when necessary. Your protein skimmer will need to be emptied approximately every other day. Follow package instructions for replacement of carbon filters. When water becomes overly soiled (i.e. cloudy), you will need to change it. This will require large containers full of RODI filtered and salted water, and pumps to remove the old water while adding the new.
The shark should not appear to be "panting" or be overly lethargic. Its eyes and skin should not have any discolorations or white spots. Sharks are prone to bacterial and parasitic infections. This can cause discoloration of the skin, frequent "yawning," and chaffing on the bottom of the tank. Be watchful for any of these behaviors when raising your shark.
