As the saying goes, “What goes up must come down.”
But how much down?
After a meteoric rise in the last quarter of 2024, from around $5 to a high of nearly $25, SOUN started to lose its momentum. We captured the following chart on January 12, after price has already decreased to $14.09, down from an all time high of $24.98, which the stock printed on December 26:
SoundHound’s best respected daily moving average support band, which is constructed by the stock’s 254-day EMA and its 258-day EMA, is seen in the above chart way below the last closing price. The daily MA support band was about 50% below the stock’s price, spreading from $7.12 to $7.17.
Five weeks after, SOUN gapped lower and closed that session at $10.97. That fresh low was, however, still quite far and above the stock’s daily MA support band:
Support was at $8.39-$8.44, which was more than 23% below the stock’s closing price.
And then on February 25, SOUN kissed its daily MA support band and bounced away from it:
In the week after, SOUN kept trading above its daily MA support band:
While dealing with support, we must not ignore the stock’s 30/34-day SMAs, which act as resistance:
Trading continues. SOUN may bounce up from here and break resistance. It may also, however, break below support. Who knows?