SOUN’s Record-Volume Gap Flags Further Upside: Buy the 13.22 Pullback, Target 14.20

Overview and Tape Read

• Instrument: SOUN (SoundHound AI, Inc.)
• Currency: USD
• Last close (approx.): 13.55–13.57 after-hours
• Session range (Aug 8): 12.75 low to 14.2467 high; Close 13.55; Massive volume ~204.2M (largest in the dataset)
• Character: Gap-and-go on record volume, intraday consolidation into a descending flag, close fractionally below full-session VWAP (~13.60)

Trend and Structure (Multi-timeframe)

• Daily trend: Reversal from late-July pullback (10.1–10.7) into a fresh breakout above prior July supply (12.6–13.4). Price is now firmly above short- and medium-term trend measures (10/20/50-day averages; see below). Structure favors a new upleg rather than a terminal blow-off because the close held well above the gap top (12.75) and prior resistance.
• 4H/Hourly trend: Post-gap impulsive leg to 14.25 followed by a controlled sequence of lower highs (14.25 → 14.02 → 14.15 → 13.90 → 13.76) while holding higher lows above 12.75. This draws a textbook bull flag/descending channel into the close with volume tapering through the afternoon—constructive digestion.

Key Levels (Support/Resistance)

• Intraday VWAP (Aug 8): ≈ 13.60. Price closed slightly below, signaling late-session distribution but within a tight margin; flip zone for next session.
• Gap reference: Previous close 10.72; gap top 12.75. The unfilled gap below 12.75 is a strong magnet only if 12.75 breaks decisively. First major support is exactly that 12.75 level (Aug 8 low and Daily S1 proximity).
• Fibonacci (Aug 8 high 14.2467, low 12.75): 23.6% 13.8937; 38.2% 13.6738; 50% 13.4983; 61.8% 13.3227; 78.6% 13.0715. Close at 13.55 sits between 50% and 38.2%, typical of healthy consolidation.
• Classic daily pivots (for next session): P ≈ 13.5156; R1 ≈ 14.281; S1 ≈ 12.784; R2 ≈ 15.012; S2 ≈ 12.019. Expect churn around P; look for bids near S1 if a deeper dip occurs.
• Horizontal supply: 13.90–14.25 (intraday distribution and prior high). Break-and-hold above 14.00 opens a retest of 14.25 with extension potential.
• Horizontal demand: 13.30 (61.8% fib, intraday shelf), 13.10–13.07 (golden pocket to 78.6%), then 12.75 (gap top/S1).

Moving Averages and Trend Filters

• 10/20/50-day MAs (approx.): Price is materially above all; 20-day ≈ low-11s; 50-day ≈ ~11; 200-day is far below (mid-single digits to ~7). This MA stack-up is bullish and indicates a strong momentum regime.
• Price above the 10/20/50-day by a wide margin implies: short-term mean reversion risk exists, but pullbacks to rising MAs are well below current price, reinforcing buy-the-dip on shallow retracements.

Momentum and Oscillators

• RSI(14) Daily (approx.): Likely in high-60s to low-70s after a 25%+ gap. That is “overbought,” but in momentum regimes, overbought can persist. Lack of a bearish daily divergence (new price high vs. prior local highs) favors trend continuation post-digest.
• Stochastics: Embedded near upper band; expect oscillations without necessarily signaling reversal.
• MACD Daily: Bullish cross with expanding histogram; aligns with beginning of a new impulse leg.

Volatility and Bands

• ATR(14) has expanded sharply (today’s true range ≈ 1.50). Expect wide intraday swings next session, favoring limit entries.
• Bollinger Bands (20,2): Price likely closed above the upper band with a band expansion. Often followed by a 1–2 day pause/flag rather than immediate reversal; pullbacks toward the upper band (now rising) are buyable.

Volume, Money Flow, and Breadth Proxies

• Record volume day (~204M) following prior high-volume up day in July suggests institutions participated. The close within the upper half of the daily range would have been ideal; however, closing around the 50% retrace and near pivot is still constructive given the magnitude.
• OBV/CMF/MFI (qualitative): Strong accumulation day. Afternoon volume deceleration while price drifted lower = supply absorption rather than aggressive distribution.

VWAP and Anchored VWAP

• Full-session VWAP ≈ 13.60. Close 13.55 is marginally below; the Monday open relative to VWAP will be a critical early tell. Expect bull control above it; below, look for bids into 13.32–13.07.
• Anchored VWAP from the session low (12.75) will sit near 13.5–13.6; defending that band confirms ongoing control by buyers of the morning impulse.

Ichimoku (qualitative read)

• Price well above the cloud; Conversion > Base; bullish lagging span likely clear of price. Cloud twist ahead rising. Net: bullish regime with room for a flag resolution higher.

ADX/DMI

• ADX rising and DI+ > DI- expected after such a thrust. Indicates trend strength; favors buying dips or breakouts rather than shorting.

Elliott/Fibonacci Structure (heuristic)

• The gap-thrust to 14.25 resembles a wave-3-of-3 on intraday degree. The afternoon descending flag is wave-4 consolidation. A modest wave-5 push typically retests or marginally exceeds the prior high (targets 14.20–14.50) before a larger-degree pullback.

Candles and Pattern Diagnostics

• Daily candle: Wide-range, semi-spinning top near highs on extreme volume—classic continuation marker after a gap-and-go when followed by controlled consolidation.
• Intraday: Descending flag/coil from 14.25 high, with higher-timeframe bullish context.

Scenarios for the Next 24 Hours (probabilistic)

• Base Case (55%): Early dip toward 13.32–13.10 (61.8% to 78.6% retrace), buyers step in; intraday reclaim of VWAP 13.60 leads to a grind toward 13.90–14.10. If 13.90 breaks, a tag of 14.20–14.25 is likely.
• Momentum Continuation (30%): Small or no dip; quick reclaim of 13.70–13.90 and breakout above 14.00; direct retest of 14.25 with extension to 14.40–14.50 if stops cascade.
• Deeper Pullback (15%): Weak open below 13.20 that accelerates into 12.95–12.75; first test likely holds on initial attempt given the gap significance. Only a decisive close below 12.75 would jeopardize the breakout thesis and open a partial gap fill toward 12.20.

Risk/Reward and Execution Plan

• Long setup preference: Buy-the-dip into the golden pocket 13.32 → 13.07 zone, with prime entry around 13.20–13.25. This aligns with fib confluence, intraday shelves, and proximity to anchored VWAP band.
• Target: 14.20 near prior day’s high cluster and just below R1 14.28 for high fill probability on strength.
• Stop (not required but recommended): Below 12.70 (beneath gap top S1 12.78), or a tighter tactical stop below 13.00 if risk needs trimming. With a 13.22 entry and a 12.70 stop, risk ≈ 0.52; target 14.20 implies reward ≈ 0.98; R:R ~ 1.9:1. If using a 13.10 stop, R:R improves, but probability of stop-out rises.

Why not short here?

• Despite overbought conditions, the context is a fresh breakout on record volume, above all key moving averages, with a bullish flag into the close. Short setups have poor expectancy unless 12.75 fails on volume. Mean reversion may occur intraday, but the higher-timeframe edge remains long-on-dips.

Confluence Summary

• Bull flag into close + record volume + price above prior resistance + fib/golden pocket support below + bullish momentum/trend indicators = positive expectancy for a dip buy, targeting a retest of 14.2–14.5 in the next session.

Actionable Plan for Next Session

• Decision: Buy (Long).
• Optimal Entry: Limit buy around 13.22 to capture a typical early-session pullback into the 61.8–78.6% retracement zone.
• Profit Target: 14.20 (beneath prior high/near R1), allowing for fills on initial breakout attempt.
• Contingency: If price never dips and instead breaks 13.90 with strength and volume, an alternate buy-stop entry above 13.95 aiming 14.20–14.40 is acceptable, but the primary plan remains to buy the dip.