SoFi Stock Has Doubled in a Month; Here’s the Trade
SoFi stock has doubled over the past month. Here's where to buy the dip now (and how high it could still go).
SoFi Technologies (SOFI) - Get Free Report stock has roughly doubled in the past month.
Measured from the May low to the June high, the shares have climbed about 130%. At last check on Thursday the stock was down 4.3%.
When we previously looked at the loan provider, I had mapped out a few upside levels but did not expect it to rally in 12 of 13 sessions and almost double in that span.
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The stock has been part of the recent momentum burst for the bulls. We’re seeing better price action in small-cap stocks, as well as growth stocks via the ARK Innovation ETF (ARKK) - Get Free Report.
Given how beaten down many of these stocks have become, it was only a matter of time before investors saw some relief.
Now that SoFi is pulling back after the big run, investors are wondering where support may come into play. Let’s have a look at the chart.
Trading SoFi Stock
Chart courtesy of TrendSpider.com
When I previously looked at the stock, $8.50 was about as far as we were looking for the stock to go in the short term. At the time, that was good for another 21% rally and would send SoFi stock to 52-week highs.
Well it did even better, running to a recent high of $10.23.
Buyers are stepping in on today’s pullback. At the session low, the shares were down almost 9%.
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From here, let’s see whether SoFi stock can give us a retest of the $8.50 level and the rising 10-day moving average.
In general, the 10-day moving average is active support for stocks in a strong bullish trend. When combined with the prior 52-week high, this could give the bulls a reasonable risk/reward buy-the-dip setup on the stock.
It helps that the first-quarter high is nearby, too, at $8.24. Further, the $8 to $8.50 zone has played a notable role in the stock’s price action — mostly serving as resistance — for more than a year now. It would be very constructive to see this zone turn into support.
On the upside, a move back up through $10 puts the recent high in play. Above $10.23 and SoFi shares could climb to the 161.8% extension at $11.17.
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