To The Moon

$SoFi Technologies Inc.(SOFI)$ investors saw SOFI's massive earnings surge disappear as sellers capitalized to take profits. However, we are seeing investors coming back on the buying demand.

SOFI remains business model is working, with significant gains in new products and members and a focus on higher-income depositors and borrowers. With the impending rate cut, we should be seeing SOFI borrowing business rising.

Due to its higher number of customers, an extensive portfolio of products, and well-controlled funding costs, SoFi's revenue increased by 22% y/y to US$597mn in 2Q24, largely driven by 80% y/y growth in financial services segment, reducing its reliance on lending business. Well-controlled delinquency.

The student loan refinancing tailwinds are expected to provide another substantial boost to SoFi's earnings in 2024.

MACD Bullish Crossover

With SOFI's bearish thesis weakening, short-sellers is not expected to have another blistering run against buyers.

We are seeing that bearish crossover which shows that sellers or short-sellers are gaining control and a drop or continued weakness have disappeared. The MACD is composed of two moving averages, a fast line and a slower MACD line.

The fast line crosses above the MACE line from below it, it is a bullish crossover.

SOFI Still Perform Below S&P 500. Still Room To Move Higher

Even as SoFi Technologies faces challenges in its lending business, it continues to demonstrate significant momentum in overall revenue growth as it diversifies into its financial services and technology platforms. SOFI delivered a 37% increase in revenue of $645 million, beating consensus estimates of $556 million.

So we could be seeing SOFI closing up the gap towards the S&P 500.

RRG Indicator - SOFI Moving From Improving To Edge Of Leading Quadrant

An RRG is a circular chart divided into four quadrants, each representing distinct stages of price momentum and relative strength. The horizontal axis typically denotes the relative strength of an asset, while the vertical axis indicates its momentum.

Assets positioned in the leading quadrant exhibit both strong relative strength and positive momentum, making them potential candidates for further analysis or investment.

Conversely, assets in the lagging quadrant demonstrate weak relative strength and negative momentum, signaling potential underperformance.

The key feature of an RRG lies in its ability to visualize the rotational dynamics of assets, showing how they transition between quadrants over time. This visual representation helps traders identify emerging trends, rotational opportunities, and potential shifts in market leadership, empowering them to make informed decisions in their trading and investment strategies.

• Leading Quadrant: Assets positioned here exhibit both strong relative strength and positive momentum, indicating potential outperformance.

• Weakening Quadrant: Assets in this quadrant show strong relative strength but decreasing momentum, suggesting a possible shift towards underperformance.

• Lagging Quadrant: Assets in this quadrant have weak relative strength and negative momentum, signaling underperformance.

• Improving Quadrant: Assets here display improving relative strength but may still have negative momentum, indicating a potential turnaround.

Counter-clockwise Movement: SOFI is showing to move in the opposite direction, from lagging to leading or improving quadrants, are gaining relative strength and momentum.

Improving to Leading Rotation: SOFI is moving from the improving quadrant to the edge of leading quadrant indicate strengthening momentum and potential outperformance.

$Financial Select Sector SPDR Fund(XLF)$ is moving within the leading quadrant, this shows strength and momentum in the financial sector.

Summary

Looking at how SOFI have recovered from bearish crossover on the MACD to be in bullish crossover, though SOFI performance is still below S&P 500, but we are seeing strengthening momentum and potential outperformance from the RRG indicator.

I see potential on SOFI to move higher as I am holding my position.

Appreciate if you could share your thoughts in the comment section whether you think SOFI would continue to perform after the rate cut?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.