SoFi (SOFI) Surges 16.12% in 3-Day Rally as MACD Golden Cross and Rising Channel Signal Strong Bullish Momentum

Candlestick Theory

SoFi Technologies (SOFI) has experienced a three-day rally, surging 16.12% with a 4.52% gain on the most recent session. The price action suggests a potential bullish bias, with higher highs and higher lows forming a rising channel. Key support levels are evident at $22.52 (August 20) and $21.46 (August 6), while resistance appears consolidated near $25.25 (August 22) and $26.38 (August 25). Recent candlesticks, including a long white candle on August 25, indicate strong buying pressure, with wicks extending below the $24.81 level, reinforcing these support zones. However, bearish signals like the August 19 session’s long black candle (down 6.11%) suggest volatility remains a risk, with potential for retesting key levels.

Moving Average Theory

Short-term momentum aligns with a bullish bias, as the 50-day moving average (calculated from historical data) sits above the 200-day MA, confirming an uptrend. The 100-day MA further reinforces this, with the current price of $26.15 trading above both. A crossover of the 50-day and 100-day MAs in recent weeks would signal accelerating momentum. However, the 200-day MA, acting as a dynamic support, must hold above $21.46 to avoid a potential breakdown. If the price closes below the 50-day MA, it may indicate a near-term correction, though the longer-term trend remains intact due to the 200-day MA’s upward trajectory.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line (golden cross), suggesting a short-term bullish shift. The KDJ oscillator shows %K rising above %D in overbought territory (RSI >70), indicating potential exhaustion but not immediate reversal. Divergence between the KDJ and price action is absent, which supports the continuation of the uptrend. However, the RSI reading of 70+ raises caution, as overbought conditions may lead to a pullback if volume fails to sustain momentum.

Bollinger Bands

Volatility has expanded in recent sessions, with the price trading near the upper Bollinger Band ($26.38 on August 25). This suggests a strong breakout phase, but the bands’ width indicates heightened uncertainty. A contraction in volatility—such as the bands narrowing—would typically precede a breakout, but the current expansion aligns with the aggressive price rise. Traders should monitor if the price remains within the bands; a break below the lower band ($22.90–$24.81 range) could signal a reversal.

Volume-Price Relationship

Trading volume has surged during the recent rally, peaking at 90.2 million shares on August 25, validating the price strength. The volume profile shows a positive correlation with upward moves, particularly in the past three sessions, where higher volume accompanied higher closes. However, a divergence may emerge if volume declines during further gains, as this could indicate waning conviction. For now, the volume pattern supports the continuation of the trend.

Relative Strength Index (RSI)

The RSI has entered overbought territory (>70), which typically signals a potential correction. However, in strong uptrends, overbought conditions may persist for extended periods, especially when accompanied by rising volume and positive momentum indicators like MACD. A close below 70 would suggest a pullback, but a sustained move above 70 with expanding volume may indicate the trend remains intact. Caution is warranted if the RSI fails to make higher highs despite rising prices, signaling early divergence.

Fibonacci Retracement

Key Fibonacci levels from the recent low ($14.02 on May 19) to high ($26.38 on August 25) include 50% at $20.20 and 61.8% at $20.83. These levels align with historical support zones (e.g., $21.46 and $22.52) and may act as critical barriers for a potential pullback. A breakdown below 50% would increase the likelihood of a test of the 38.2% retracement at $17.20, while a sustained close above 61.8% could target $24.00 as a consolidation level.

Backtest Hypothesis

The MACD-Golden-Cross backtest (2022–2025) would likely show mixed results given SOFI’s volatile profile. While golden crosses in early 2024 and mid-2025 captured strong upward moves (e.g., the 19.89% surge on April 9), the strategy’s reliance on death-cross exits could lock in profits prematurely during overbought phases. For instance, a golden cross in late 2023 might have triggered a long position, but a subsequent death cross in early 2024 could have missed the full extent of the rally. The backtest would highlight the importance of combining MACD signals with RSI and volume analysis to filter out false positives, particularly during periods of high volatility. Additionally, the absence of risk controls in the strategy could lead to significant drawdowns during sharp corrections, such as the 6.11% drop on August 19.