SOUN Sound Off! Updates

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Swing Trade Setup for SOUN: Updated Probabilities and Returns

Posted on July 17, 2025, at 3:42 PM CDT

Overview

SoundHound AI, Inc. (SOUN) continues to attract swing traders with its strong bullish momentum and high short interest. As of July 17, 2025, SOUN is trading at $12.64, up 7.30% with a daily volume of 51.74M shares. This updated swing trade setup incorporates recent price action, technical indicators, and market sentiment to outline a short- to medium-term trading strategy.

Market Snapshot

  • Current Price: $12.64
  • Daily Change: +0.86 (+7.30%)
  • High/Low: $12.78–$11.96
  • Volume: 51.74M
  • Market Cap: $5.08B
  • 52-Week Range: $3.94–$24.98
  • Short Interest: ~35% (potential for short squeeze)
  • Beta: ~2.87 (high volatility)
  • EPS (TTM): -$0.5484
  • P/E (FWD): 120.38
  • Next Earnings: August 6–11, 2025

Trade Setup

Following the breakout above $12.29 resistance, SOUN exhibits strong bullish momentum. Here’s the updated swing trade strategy:

  • Entry Price: $12.50–$12.80 (ideal entry near $12.50 on a pullback to support)
  • Targets:
    • Short-Term: $14.50 (~16% upside)
    • Mid-Term: $17.00 (~36% upside)
  • Stop-Loss: $11.50 (~8% downside)
  • Risk/Reward Ratio:
    • Short-Term: 2:1
    • Mid-Term: 4.5:1

Technical Analysis

The bullish case for SOUN is supported by the following indicators:

  • Price Action: Breakout above $12.29 resistance confirms bullish continuation, with $12.50 acting as new support.
  • Ichimoku Cloud: Price remains above the Kumo, with a bullish Tenkan-sen/Kijun-sen crossover intact.
  • MACD: Bullish crossover sustained, with a positive histogram indicating momentum.
  • RSI: Approaching overbought (~65–70, needs confirmation), suggesting caution but room for upside.
  • Volume: 51.74M shares traded today, above the 3-month average of 35.75M, indicating strong buying interest.
  • Short Interest: ~35% short interest increases the likelihood of a short squeeze if momentum continues.

Support Levels: $12.50, $11.96, $11.12
Resistance Levels: $13.00, $14.50, $16–$18
A sustained move above $13.00 could target $17.00–$18.00 over 4–8 weeks.

Probabilities and Returns

The table below outlines potential outcomes, probabilities, and returns for a $10,000 position at a $12.50 entry price. Probabilities are estimated based on technical indicators, historical patterns, and market sentiment.

Scenario Exit Price Probability Return (%) Return ($)
Bullish (Mid-Term) $17.00 25% 36.00% $3,600
Bullish (Short-Term) $14.50 30% 16.00% $1,600
Neutral (No Move) $12.50 25% 0% $0
Bearish (Stop-Loss) $11.50 20% -8.00% -$800

Expected Return: 12.20% ($1,220.00 on a $10,000 position)

Risk Considerations

While the setup remains attractive, traders should consider the following risks:

  • Volatility: SOUN’s high beta (~2.87) suggests significant price swings, increasing both upside and downside risk.
  • Fundamentals: Negative EPS (-$0.5484) and recent insider selling (~$525M over five days) may impact sentiment.
  • Earnings Risk: Upcoming earnings (August 6–11, 2025) could introduce volatility.
  • Market Conditions: Broader AI sector skepticism or macroeconomic factors could pressure speculative stocks.

Action Plan

To execute this swing trade:

  1. Enter at $12.50–$12.80 on confirmation of support (e.g., pullback to $12.50 with strong volume).
  2. Set a stop-loss at $11.50 to limit downside risk to ~8%.
  3. Target $14.50 for a conservative exit or $17.00 for a momentum play.
  4. Monitor resistance at $13.00 for breakout confirmation.
  5. Stay alert for news, particularly earnings or AI sector developments.

Conclusion

SOUN’s breakout above $12.29 and strong volume make it a compelling swing trade opportunity, with a potential short squeeze adding to the upside. The expected return of 12.20% and favorable risk/reward ratios are attractive, but traders should remain cautious due to volatility and upcoming earnings. Conduct your own research before trading.

Disclaimer: Trading involves significant risks, including the potential loss of capital. This analysis is for informational purposes only and does not constitute financial advice. Conduct your own research or consult a financial advisor before making trading decisions.

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