Watch These SoundHound Stock Price Levels Amid Large News-Related Moves
SoundHound AI (SOUN) shares surged 21% on Thursday after the provider of voice generative artificial intelligence (AI) announced that it had acquired enterprise AI software firm Amelia for $80 million, a deal aimed at expanding its footprint in conversational AI across new verticals and brands.
However, the stock gave back 5% in extended trading after SoundHound reported its quarterly results. Although earnings and revenue both surpassed estimates, the company still posted a larger GAAP net loss in the period compared to a year earlier, possibly contributing to post-market weakness.
Descending Triangle in Focus
Since recording their 2024 high in mid-March, SoundHound shares have oscillated within a descending triangle, a chart pattern consisting of one trendline connecting a series of lower highs and a second horizontal line connecting a series of lows.
Although technical analysts typically consider descending triangles bearish, they can also signal the continuation of a move higher if formed following an uptrend, which is the case on the SoundHound chart. Moreover, the stock’s close Thursday above the 50-day moving average on the highest trading volume since mid-July favors an upside breakout.
Upside Price Levels to Watch
Looking ahead, investors should monitor three key higher price levels likely to gain attention.
Firstly, it’s worth watching if the shares can break out above the descending triangle’s top trendline, which currently sits around $5.75. A volume-backed move would likely act as a catalyst for further buying and could potentially trigger a short squeeze, given that more than 26% of the stock’s float is held in short positions.
Upon a breakout, the stock could test the $8.60 level, where sellers may be happy to book profits near a horizontal line connecting the June 2022 countertrend peak with a series of prices located around this year’s high.
A more bullish move may lead to a retest of the $15 area, where the shares would likely run into overhead resistance near a range of trading levels situated in close proximity to the SoundHound’s all-time high (ATH) set in early May 2022.
Downside Price Levels to Monitor
Despite the bullish technicals on SoundHound’s chart, investors should monitor the descending triangle’s lower trendline around $3.50. A breakdown below the pattern opens the door for falls to lower crucial support levels at $2.60 and $1.60.
After the 21% jump during Thursday’s regular session, SoundHound shares fell 5% to $4.95 in after-hours trading.
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