SoundHound AI
SoundHound (SOUN) is at it again as the stock is following a classic pattern of finding support at round numbers.
Last week, I wrote about shares of SoundHound as the stock was careening lower after an earnings “miss.”
“I’m taking advantage of the dip to add to my position as SOUN recently announced Nvidia (NVDA)’s new position in their stock. Watch for support at $6 followed by a move back to $8 and then $10.”
SOUN shares are 20% higher today, crossing back above $6 on no meaningful headlines as investors and traders are taking advantage of the recent selloff to open new positions.
I put quotes around “miss” above due to the fact that SoundHound’s earnings were very close to expectations. EPS were light by $0.01 and revenue was inline. The company also provided an outlook that was inline with The Street’s expectations.
The recent selling was not the result of the “miss,” but instead a “sell the news” move. This means that the stock is likely to follow through with today’s rally with a target of $8 and then $10.
Mind Medicine
First some disclosure… I currently own shares of MindMed (MNMD) and have for more than five years.
That said, MindMed’s shares are trading 50% higher today on news that the FDA had granted Breakthrough Therapy designation and positive study data from the phase 2B study of “mm120,” a treatment for generalized anxiety disorder.
We’ll talk more about the details of the announcement in tomorrow’s issue, today let’s talk about what to expect from the stock.
Shares are pulling off their highs over $11 as MNMD shares have hit an oversold reading of its RSI. Over the short-term, I expect to see the stock retake the $10 mark and move towards a short-term target of $12.
Keep in mind that what we’ve seen today is what I refer to as “Crescendo Buying.” That simply means that the stock is trading with unusually high volume, an unusually large price move while being overbought. This situation usually precedes a short-term selloff in the stock followed by another parabolic rally.
For now, expect to see $10 act as some resistance for the shares and $8 as support in the case of a short-term pullback.
Microchip Technology
Here’s a move you don’t see too often. Shares of Microchip Technology (MCHP) are trading 7% higher today on no relevant headlines. The move comes on average volume, which confirms that nothing special is driving the stock.
That said, I love moves like this. First, the stock is breaking through its top Bollinger Band. This simply means that the move is considered “unusual” but moves like this tend to act as an inflection point.
That inflection point for the stock would be at a price of $92.50, which is the new high for the stock after trading in a wide range since topping at $92.50 in December.
Positive momentum should increase on the shares making this a new bullish trend for MCHP shares. I’m targeting a move to $100 before we see meaningful resistance.
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About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.