My Watchlist [111]: SOFI... Profitable, But Lower?
Hi everyone. Today I’ll be updating my TA on a FinTech company:
SOFI has been bound by its resistance trendline (in purple), which has been in place since it peaked at 28.26 in 2021.
A closer look at the SOFI chart shows a climax on 12th June, with a top-heavy rejection candle. It was also unable to reclaim the 7.23 level, which has acted as strong resistance since April.
It is also trading in a descending channel consolidation setup - at least, that’s what it is for the time being. Fundamentally, I am expecting a retest of the lower support trendline, which should coincide with a retest of the longer-term green support trendline dating back to 2023.
Furthermore, SOFI has 2 unfilled gaps to the downside, namely the 5.48-5.59 and the 6.05-6.10 gaps. These gaps are likely to fill in the near future, with a retest of the green trendline the most likely outcome.
The next major support level I’ll be watching is 5.09, followed by 4.45. However, I am prepared to go long on SOFI, if it is able to break out of the purple resistance trendline and start a new uptrend. Until then, it is most likely headed lower, with rips being sold.
In my last newsletter on SOFI, I was still fairly bullish on the company. It had just turned GAAP profitable and was reporting fairly decent growth estimates. The technical setup was also suggestive of a move up towards 13.86.
However, SOFI then announced a convertible senior note offering, which killed the bullish momentum in the stock. Interestingly enough, this coincided with a rejection at the IPO resistance trendline.
In light of the weakening technical setup and general sentiment over the company, I am downgrading SOFI to a HOLD. A breakdown below the green trendline will trigger a SELL, as it would signify a longer-term trend breakdown.
Sentiment: HOLD (Downgraded from BUY)
Summary (with Price Targets - NFA):
Rejected the IPO resistance trendline, and is now trading in a descending channel consolidation setup which should see both the 6.05-6.10 and 5.48-5.59 gaps being filled. Ultimately, it should find support either at 5.09 or 4.45
All right, that’s all for this newsletter. Till next time!
$SoFi Technologies Inc.(SOFI)$ $Affirm Holdings, Inc.(AFRM)$ $PayPal(PYPL)$ $Upstart Holdings, Inc.(UPST)$ $Visa(V)$
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- catandbull·06-17PossibleLikeReport