SOUN at the Edge: Fading the 12.00 Shelf as the Gap Magnet Pulls

Instrument: SoundHound AI, Inc. (SOUN) Current context snapshot (as of 2025-08-26 ~20:29 UTC):

• Last traded near 12.02–12.09 after-hours; session range 12.69 high to 11.92 low; close near 12.02 on elevated volume (~69M). Intraday VWAP estimated ~12.23–12.30, with price finishing below VWAP.
• Persistent pullback since the mid-August spike to 17.08, now testing the 12.00 psychological/technical shelf.

Step-by-step, multi-tool technical analysis

1. Multi-timeframe trend and structure

• Daily trend: Lower highs and lower lows since the 16.5–17.1 area (8/13–8/14). Post-parabolic cool-off continues; price is below short- and intermediate-term MAs. Structure risk is a continuing gap-fill toward the late-July zone.
• 4H/1H structure (inferred from session tape): A failed breakout early in the session to 12.69, then persistent selling pressure drove price below the intraday pivot and VWAP. Bounces were sold; the afternoon stabilized around 12.00–12.10. This signals overhead supply around 12.30–12.60 and a weak demand response at the figure (12.00).
• Range context: Today’s true range ~0.77; recent daily ATR(14) approximates ~0.90–1.10. The instrument remains in a high-volatility, mean-reverting-but-downward-bias regime.

2. Moving averages and trend filters

• 5-day SMA ≈ 12.27 (estimate from recent closes 12.44, 12.23, 12.56, 12.11, 12.02). Price below: short-term bearish.
• 10-day SMA ≈ 13.8–14.2 (heavily influenced by prior 16–17 prints). Price well below: intermediate momentum bearish.
• 20-day SMA likely ~12.9–13.5; price below: trend bias down.
• 8/21 EMA, 34/55 EMAs (approximate): all above current price. Slope negative across timeframes. No bullish MA crossover in sight.
• Implication: Trend-following filters favor shorts on rallies until price can reclaim and hold above 12.5–12.8 and re-approach the 20DMA.

3. Momentum indicators

• RSI(14) daily: Estimated mid-30s to ~40. Not deeply oversold; room to fall. Momentum agrees with trend.
• Stochastic (14,3,3) daily: Likely sub-20 and rolling; weak momentum with risk of bear flag bounces but no confirmed reversal.
• MACD daily: Negative histogram, line under signal and below zero after the August 19–20 cross. Momentum downtrend intact.
• 1H momentum: Bearish divergences absent; intraday lower highs into the close. Supports follow-through lower unless a morning squeeze resets momentum.

4. Volatility and bands

• Bollinger Bands (20,2): Price hugging or riding the lower band, consistent with a bleeding downtrend. Lower band likely ~11.8–12.0, middle band ~13.2. Riding the band suggests momentum continuation with intermittent mean reversion pops.
• Keltner Channels: Price biased to the lower channel; expansion after the mid-Aug spike is contracting but still elevated. Expect choppy, directional pushes with fadeable pops.
• ATR(14): ~0.9–1.1 gives an expected 1-day move envelope. A 24-hour 0.5–0.8 decline is feasible without a shock.

5. Support and resistance mapping

• Overhead supply clusters: 12.30–12.35 (intraday VWAP/afternoon congestion), 12.50 (R1 pivot), 12.60–12.70 (today’s failure zone, 8/22 close 12.56). 12.98–13.10 (R2/pivots and round-number resistance) is the next band if a squeeze occurs.
• Supports: 12.00 (psychological and multi-touch daily shelf), 11.73 (S1 pivot), 11.45 (S2 pivot/near 88.6% fib retrace), 10.70–10.80 (gap-fill zone/top of late-July base).
• Volume profile (session): Heavy transacted volume near 12.20–12.30; finishing below this node converts it into supply. That profile favors selling tests into that area.

6. Fibonacci and harmonics

• Swing reference: Jul 29 low 10.69 to Aug 13 high 17.08 (range 6.39).
  • 61.8% retrace ≈ 13.13 (already lost).
  • 78.6% retrace ≈ 12.06 (price is sitting right here). This is a classic deep-retrace support; a minor bounce is possible, but losing 12.00 would often extend toward the 88.6% (~11.42) and sometimes full retrace tests.
• Harmonic lens: The deep 78.6% test resembles a late-stage Gartley/Bat potential PRZ. But confirmation is absent (no strong reversal candle, no bull divergence). Without confirmation, harmonics alone do not negate the prevailing downtrend.

7. Candlestick and intraday tape clues

• Today’s daily candle: Opened strong, sold off to near the lows, closed weak; long upper shadow intraday. Not a reversal structure. If anything, it’s a failed breakout/continuation lower.
• Hourly prints: First hour spike to 12.69 met with immediate supply; subsequent hours set successive lower highs and retested 12.00 multiple times with tepid bounces. End-of-day lacked aggressive dip-buying.

8. Ichimoku (daily, approximate)

• Price below Tenkan and Kijun; Tenkan < Kijun; Span A flattening/down; Span B below price but cloud ahead likely thinning. Net bearish. Any rally into Kijun/Tenkan (~12.7–13.1 neighborhood) may be sold absent a Kumo twist or bullish TK cross.

9. Market internals/flow proxies

• OBV: Rolling over since 8/12; distribution days outnumber accumulation. Today’s down-close on high volume reinforces sellers in control.
• MFI: Likely sub-50 and declining; weak demand. No signs of a buy-the-dip surge.
• VWAP (today): Price closed below VWAP; any morning test/rejection of VWAP favors short entries with defined risk.

10. Pivot levels for the next session (computed off today’s H/L/C ≈ 12.69 / 11.92 / 12.02)

• Pivot P ≈ 12.21
• R1 ≈ 12.50, R2 ≈ 12.98, R3 ≈ 13.27
• S1 ≈ 11.73, S2 ≈ 11.44, S3 ≈ 10.96
• Expect mean reversion to P on light squeezes; fades preferred unless reclaimed and held.

11. Pattern recognition

• Descending channel since mid-Aug; today’s intraday attempt at the upper boundary failed. Continuation probability modestly favors another push toward the lower boundary (11.7–11.4) within 24 hours.
• Gap-fill dynamic: The August 8 gap (from ~10.72) remains partially unfilled; price is migrating into that vacuum. Gaps often act like magnets once the top shelf (12–13) breaks.

12. Scenario analysis (24-hour horizon)

• Bearish base case (60%): Early attempt to probe 12.20–12.35 meets supply; rejection sends price through 12.00 and toward 11.70 (S1) with potential extension to 11.45 (S2) if liquidity pockets slip.
• Range/neutral (30%): Chop between 12.00 and 12.50, with VWAP pinball. Weak close bias remains unless the range resolves above 12.50–12.60.
• Bullish squeeze (10%): Strong open, reclaim/hold above 12.50 and pivot cluster, quick tag 12.90–13.10 (R2 zone). Probability lower without catalyst; fade zones preferred unless breadth and volume flip decisively.

13. Risk management, timing, and execution cues

• Optimal short tactics: Enter on a pop into 12.18–12.30 (pivot/VWAP zone) with sellers showing on the tape (lower highs on 5–15m, rejection wicks, delta skew). If price instead drifts, consider chasing on a clean break and retest of 12.00 with VWAP overhead.
• Invalidation: Hourly close above 12.65–12.70 (today’s high area) weakens the short thesis and risks squeeze to ~12.98–13.10.
• Targets: First target 11.70 (front-run S1), stretch 11.45 (S2/near 88.6% fib). For a 24-hour plan, bank at 11.70; reassess for continuation.
• R/R illustration: Entry 12.20, target 11.70, risk if stopped 12.72. Reward 0.50 vs risk 0.52; base case is conservative. If momentum accelerates past 11.90, sliding target 11.50 improves R/R.

14. Synthesis and conclusion

• Confluence of: downtrend across MAs, negative momentum (MACD/RSI), repeated failure at intraday resistances/VWAP, deepening retrace into a partially unfilled gap, and weak closing posture. While 12.00 is a notable shelf and a 78.6% fib (risk of minor bounce), the weight of evidence favors selling strength for a push toward 11.70 within 24 hours.
• Hence, tactical short into 12.20 area with a take-profit at 11.70 aligns with the prevailing structure and ATR envelope, while keeping an eye on a potential quick squeeze risk above 12.65–12.70.

24-hour price path expectation

• Likely path: Probe 12.18–12.35 at or near the open → rejection → 12.00 test → break to 11.85–11.75 → tag 11.70. Less likely: reclaim 12.50, squeeze to 12.90–13.10.