SoFi Technologies Surges 16.12% on Bullish Technical Signals as MACD and Moving Averages Confirm Uptrend

Candlestick Theory

SoFi Technologies (SOFI) has exhibited a strong bullish momentum, with a 16.12% rally over three sessions, capped by a 4.52% gain on the most recent day. The recent price action forms a bullish engulfing pattern, where the last three candles close near their highs, suggesting aggressive buying pressure. Key resistance levels emerge at $26.15 (current close) and $25.25 (August 22 high), while critical support is identified at $22.90 (August 22 low). A breakdown below $22.90 could trigger a test of the next support at $21.46 (August 6 close).

Moving Average Theory

Short-term momentum is reinforced by the 50-day and 100-day moving averages, which are currently above the 200-day line, indicating a bullish bias. The 50-day MA (calculated as ~$21.40) and 100-day MA (~$20.70) align with recent support levels, suggesting these could act as dynamic floors. The price’s current position above all three MAs confirms an uptrend, though a crossover below the 50-day MA would signal a potential trend reversal.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line, reinforcing bullish momentum. The KDJ (Stochastic) oscillator shows the stock entering overbought territory, with a %K of 85 and %D of 78, suggesting a possible near-term pullback. However, the absence of bearish divergence between price and the KDJ indicator implies the uptrend may persist.

Bollinger Bands

Volatility has expanded, with the price approaching the upper Bollinger Band at $26.40. This contraction-expansion pattern suggests heightened momentum, but the price’s proximity to the upper band also signals a potential overbought condition. A break above the band may extend the rally, while a retest of the middle band (~$24.00) could consolidate gains.

Volume-Price Relationship

Trading volume has surged on the recent rally, with the August 25 session recording 90.2 million shares traded—well above the 30-day average of ~60 million. This validates the sustainability of the price action. However, if volume moderates in subsequent sessions while the price continues to rise, it may indicate waning conviction.

Relative Strength Index (RSI)

The 14-day RSI stands at ~75, entering overbought territory. While this typically warns of a potential correction, the RSI’s alignment with the MACD and Bollinger Bands suggests the uptrend remains intact. A drop below 60 would signal a shift in momentum, but this is more likely to occur after a consolidation phase.

Fibonacci Retracement

Key Fibonacci levels derived from the major swing high ($26.15) and low ($14.00) include 38.2% at $20.07 and 50% at $20.07. These levels align with the 50-day MA, creating a confluence of support. A breakdown below the 38.2% level would target the 23.6% retracement at $17.64, where prior volume spikes suggest strong historical resistance.

Backtest Hypothesis

The backtest strategy, which triggers long entries when RSI crosses above 70 and exits when it falls below 70, achieved a 116.1% total return (24.7% annualized) from 2022 to 2025. SOFI’s current RSI (~75) aligns with the entry criteria, suggesting a potential exit signal is pending. However, the strategy’s lack of risk controls (e.g., stop-loss) exposes it to drawdowns, as evidenced by the 23.8% max drawdown. Integrating this into the analysis, SOFI’s recent overbought RSI and strong volume suggest the strategy might hold the position, but a drop below the 50-day MA (~$21.40) would invalidate the signal.