SoundHound AI
Shares of SoundHound AI (SOUN) are now trading 40% off of their highs from just a few weeks ago, as the company found themselves to be the target of a bearish report from short selling firm Capybara Research.
We’ve seen dozens and dozens of reports like this in the past, and the vast majority of them are short-term attempts to do the reverse of a “pump and dump.” The firms usually short the shares and then quickly cover their shorts after a sharp decline.
ShoundHound shares are trading at $6, which should provide some round-number and technical support. Any rally from this level will cause a fast reaction from any short seller to close the position, as a $12 price could easily happen as this is a stock that has been on the bulls “buy list.”
I’ve been a vocal bull on SoundHound and am taking the opportunity to add to my position at current levels.
lululemon
Shares of lululemon (LULU) are down almost 20% after the company posted earnings results which beat analyst expectations on the top and bottom lines.
So why is the stock trading lower?
lululemon’s management did some serious adjustments to the company’s outlook by guiding revenue and earnings for the next quarter lower AND guiding both earnings and revenue lower for the next fiscal year.
The resulting price drop takes LULU shares below all intermediate-term technical support. Traders will try to support the stock at $400, which may result in a short-term “dead-cat bounce,” but realistically, there’s a lot more downside for the stock.
Long-term support for LULU sits at $375, which is where the stock’s 20-month moving average. A break below that trend will put the stock in a long-term bear market trend.
Nike
Nike (NKE) shares are following suit with lululemon today, as the stock is trading lower on their earnings report. Earnings results were $0.23 better than expectations with in-line revenue. The company warned of a sales slowdown for the beginning of the next fiscal year, but nothing as bad as LULU.
Nike stock slid into a bearish trend in January.
Today’s move breaks the stock through critical psychological support at $100 with little technical support in sight. From a long-term perspective, NKE shares have been in a bear market since June of 2022.
Shares are 48% off of their all-time highs.
Watch for round-numbered support at $80, which also represents the stock’s October 2022 lows.
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.