SOFI Rises 8.73% as Technical Indicators Signal Bullish Momentum Amid Key Support and Resistance Levels

Candlestick Theory

SoFi Technologies (SOFI) has experienced a two-day upward trend, with a cumulative gain of 8.73%, suggesting short-term bullish momentum. Recent price action reveals a series of higher highs and higher lows, forming a potential bullish continuation pattern. Key support levels emerge at $24.91 (August 29) and $23.77 (August 15), both of which have historically acted as floors for buying interest. Resistance is concentrated near $29.63 (September 19) and $28.57 (September 18). A break above $29.63 could trigger further gains toward $30.00, while a pullback to $24.91 may indicate a consolidation phase.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages provide critical insights into trend strength. The 50-day MA (approximately $27.67 as of September 15) is rising, aligning with the recent price surge to $29.51. The 100-day MA (around $25.38 as of September 4) and 200-day MA (lower) suggest a medium-term uptrend. If the 50-day MA remains above the 100-day MA, the bullish bias persists. However, a potential bearish signal could emerge if the 50-day MA crosses below the 200-day MA, though this scenario appears unlikely given current price momentum.

MACD & KDJ Indicators

The MACD histogram has expanded positively, reflecting strengthening upward momentum. The KDJ indicator shows the %K line (stochastic oscillator) in overbought territory (>80), suggesting a potential short-term pullback. Divergence between %K and %D may indicate exhaustion, but the recent price surge has yet to show clear bearish signals. The RSI (discussed below) and MACD alignment suggest continued upward bias unless a sharp reversal emerges.

Bollinger Bands

Volatility has increased, with the price nearing the upper Bollinger Band ($29.63 as of September 19). The band’s width indicates heightened volatility, a common feature during strong trends. If the price remains within the bands, the uptrend is likely to persist. A break above the upper band may signal a continuation, while a drop below the middle band ($26.55 as of September 12) could indicate a correction.

Volume-Price Relationship

Trading volume has surged on recent gains, with $218.5 million traded on September 19, validating the price strength. High volume during upward moves reinforces the sustainability of the trend. Conversely, declining volume on subsequent rallies may signal weakening momentum. The current volume pattern supports the view that buying pressure remains robust, though caution is warranted if volume contracts during pullbacks.

Relative Strength Index (RSI)

The RSI has entered overbought territory (>70), a condition that often precedes corrections. However, in a strong uptrend, the RSI can remain elevated for extended periods. A divergence between price highs and RSI peaks would strengthen the bearish case. For now, the RSI’s alignment with price suggests the trend remains intact, but traders should monitor for a potential reversal if the RSI falls below 60.

Fibonacci Retracement

Applying Fibonacci levels to the recent high of $29.63 and low of $23.77, key retracement levels include $27.74 (38.2%) and $26.60 (50%). These levels may serve as support during pullbacks. A test of $24.91 (61.8%) could trigger a deeper correction, but the current bullish momentum suggests a rebound from $26.60 is more probable.

Backtest Hypothesis

The RSI-based strategy (buying below 30 and selling above 70) historically outperformed the benchmark with a 139.45% return from 2022 to present, despite SOFI’s current overbought RSI. This suggests the strategy may still be effective in capturing corrections during extended rallies. However, SOFI’s recent trend-driven performance implies the RSI may stay overbought longer than usual, requiring tighter stop-loss parameters. The strategy’s zero maximum drawdown and Sharpe ratio of 0.50 highlight its risk-adjusted appeal, but traders should integrate Fibonacci and moving average signals to filter false RSI overbought triggers.