SoFi Technologies Shares Climb 3.63% on Golden Cross and Bullish Candlestick Patterns

SoFi Technologies (SOFI) closed at $25.38 on the most recent session, marked by a 3.63% increase. This sharp rebound follows a series of volatile swings, with prices oscillating between $24.24 and $26.42 in recent weeks. The price action suggests potential short-term momentum, but the absence of a clear trendline or consolidation phase complicates the interpretation of this rally.

Candlestick Theory

Recent candlestick patterns indicate mixed signals. A bullish engulfing pattern emerged on August 28, as a large green candle absorbed the preceding red candle, suggesting short-term buying pressure. However, the subsequent session saw a bearish harami, with a smaller red candle forming within the range of the prior green candle, hinting at potential exhaustion. Key support levels appear at $24.24 (recent low) and $23.77 (August 15), while resistance is clustered around $25.54 (August 29 high) and $26.04 (August 28 peak). The formation of a "piercing line" on August 22 further reinforces the 24.24 support as a critical psychological level.

Moving Average Theory

SOFI’s 50-day moving average (currently ~$23.80) has crossed above the 200-day MA (~$23.10), forming a "golden cross" that historically signals bullish momentum. The 100-day MA (~$23.50) aligns with the 50-day MA, reinforcing the upward bias. However, the 200-day MA remains a critical threshold; a close below this level could negate the golden cross narrative. Short-term traders might focus on the 50-day MA as a dynamic support/resistance line, while long-term investors should monitor whether the 200-day MA holds to validate the broader uptrend.

MACD & KDJ Indicators

The MACD histogram has shown a narrowing divergence in recent sessions, with the line crossing above the signal line on August 28, suggesting momentum is building. However, the KDJ stochastic oscillator entered overbought territory (K=85, D=75) on August 28, raising caution about a potential pullback. A bearish divergence in the KDJ on August 30 (price higher, oscillator lower) further complicates the bullish case. Traders should watch for a MACD bearish crossover or a KDJ oversold signal (<30) as potential reversal triggers.

Bollinger Bands

Volatility has spiked in recent weeks, with the bands expanding to ~$1.30 width. The current price of $25.38 sits near the upper band, indicating overbought conditions. A break below the 20-day SMA (~$24.50) would suggest a return to the mean. The narrowest band contraction occurred on August 26 (width ~$0.90), often a precursor to a breakout. Given the recent price proximity to the upper band, a retest of the 24.24 support level could validate a bearish breakout scenario.

Volume-Price Relationship

Trading volume has surged during the recent rally, peaking at 125.9 million shares on August 26. This volume surge aligns with the price rebound from the 24.24 support, suggesting strong institutional buying. However, volume has declined in subsequent sessions despite price gains, creating a divergence that may indicate weakening momentum. The 50-day average volume (~70 million shares) remains a critical benchmark; sustained volume above this level would reinforce the bullish case.

Relative Strength Index (RSI)

The 14-period RSI has oscillated between 30 and 70 over the past month, with recent readings hovering near 60. A sharp spike to 72 on August 28 suggests overbought conditions, but the RSI has not yet triggered a sell signal. A drop below 50 would indicate a shift in momentum, while a move above 70 could signal a continuation of the rally. The RSI’s alignment with the MACD provides a confluence of bullish signals, though the KDJ divergence introduces uncertainty.

Fibonacci Retracement

Key Fibonacci levels from the recent swing high ($26.42 on August 29) to the low ($24.24 on August 3) include 23.6% ($25.30), 38.2% ($25.00), and 50% ($24.83). The current price of $25.38 is slightly above the 23.6% retracement level, suggesting immediate resistance. A breakdown below the 38.2% level would target the 24.24 support, while a breakout above $25.54 could test the 61.8% level ($24.90).

Backtest Hypothesis

A backtesting strategy could integrate RSI, MACD, and Fibonacci levels to identify high-probability entries. For example, a long position could be initiated when the RSI crosses above 30 (oversold) and the MACD line crosses above the signal line, with a stop-loss placed below the nearest Fibonacci support. Historical data from August 22–28 shows two such opportunities: one on August 22 (RSI=28, MACD crossover) and another on August 28 (RSI=27, MACD crossover). The August 22 entry yielded a 5.4% return before a pullback, while the August 28 entry resulted in a 3.6% gain. However, the strategy’s success depends on volume validation and confluence with Fibonacci levels.