SoFi Stock Surges 16% In Three Days As Bullish Signals Flash Overbought Warnings

Candlestick Theory
SoFi Technologies' recent candlestick pattern reveals a decisive bullish momentum. The three consecutive green candles, including a 7.24% surge on August 22 and a 4.52% gain on August 25, form a "Three White Soldiers" pattern near the $22.50 psychological support. This follows a rejection of the $24.91 resistance on August 19, which established a temporary ceiling. Current price action near $26.15 faces immediate resistance at the $26.38 swing high. A sustained close above this level could validate bullish continuation, while failure risks retesting the $24.81 support zone forged during recent volatility.
Moving Average Theory
The 50-day moving average ($19.83) exhibits a bullish crossover above the 100-day MA ($18.12), while both remain under the ascending 200-day MA ($14.75), confirming a long-term uptrend. Short-term momentum is reinforced by the price trading above all three MAs, with the 50-day MA acting as dynamic support. The alignment suggests robust trend strength, though a potential mean-reversion pullback toward the 50-day MA could materialize after the 16% three-day rally.
MACD & KDJ Indicators
MACD shows a strengthening bullish signal: the MACD line (0.68) has crossed above the signal line (0.55) with expanding histogram bars, indicating accelerating upside momentum. Meanwhile, the KDJ oscillator registers overbought conditions, with the K-line (89) and D-line (82) near extreme levels above 80. This divergence—where MACD suggests continued upside while KDJ flags overextension—warrants caution for near-term consolidation before further trend advancement.
Bollinger Bands
Price is currently testing the upper Bollinger Band ($25.80) after a volatility expansion, as bands widened from a squeeze in late July. This marks the fourth consecutive close near the upper band, signaling strong directional momentum. However, such persistent upper-band tagging historically precedes short-term pullbacks toward the 20-day moving average midline ($22.70), especially when coupled with overbought oscillators.
Volume-Price Relationship
Recent gains are validated by robust volume support. The 16% three-day surge coincided with above-average volumes (101.6M, 89.6M shares), confirming buyer conviction. Notable accumulation occurred at the $22–$23 base, where volume spikes on August 21–22 exceeded the 30-day average by 40%. Conversely, the August 19 breakdown on 82.5M shares signaled distribution. Current volume trends align with bullish price action, though fading volume on extensions beyond $26 may undermine sustainability.
Relative Strength Index (RSI)
The 14-day RSI at 78 signals overbought territory, having surged from 42 two weeks ago. While this reflects potent short-term momentum, it historically precedes consolidation; four of the last five instances above 70 resulted in 5–8% pullbacks. Bullishly, RSI’s higher low in late July diverged from price, foreshadowing the current uptrend. A retracement toward RSI 60 would align with typical cyclical behavior.
Fibonacci Retracement
Applying Fib levels between the June swing low ($7.90) and August peak ($26.38), key retracement zones emerge. The 23.6% level ($22.10) recently acted as support during the mid-August consolidation. Confluence exists at the 38.2% level ($19.65), which aligns with the 50-day MA and the early August breakout point. Sustained trading above $26.38 could target the 161.8% extension ($31.50), while failure to hold $23.61 (the recent breakout) risks a deeper pullback toward $20.50.
Confluence and Divergence Summary
Confluence of bullish signals—moving average alignment, MACD acceleration, volume-supported breakout, and Fib support—supports the ongoing uptrend. However, overbought readings (RSI 78, KDJ >80) and Bollinger Band extremes create tactical divergence, suggesting near-term exhaustion probability. A consolidation phase between $24.80–$26.40 appears probable before the next directional catalyst.