A Trading Plan for the SoFi Breakout
Shares of SoFi are quietly making new highs, is this a trading opportunity?
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When I was young, if I wanted money, I had to stand in line at a bank. You’d fill out a form, wait your turn, and if you got there before the bank closed at 3 p.m., you’d have cash in your pocket.
Decades have passed, and the world has changed. There are still bank tellers, but the practice of lining up wide and deep just to cash a check or get pocket money for the weekend has long since passed.
Where the Puck Is Headed
What will banks look like decades from now? They will be ‘round the clock and entirely digital.
Wayne Gretzky famously said the key to his success was to “skate to where the puck is going, not where it has been.” If the puck is going toward 100% digital financial services, then a digital financial services company could have potential.
Digital Financial Future
This brings us to SoFi SOFI. The San Francisco-based provider of credit cards, loans and other investment products is one of the leading names in digital financial services.
We’ve had success with SoFi as a trading stock in the past, as seen here. In 2024, we were able to book a 30% gain in seven weeks in this stock. Lately, SoFi has been quiet.
That could be about to change. Shares of SoFi reached a three-month high earlier this week, and could be ready for a move higher.
SoFi has quietly formed a series of higher highs (HH) and higher lows (HL), terms which define a bullish trend. Volume has been slowly building over the past three weeks, as the stock continues to creep higher (shaded yellow).
The stock is climbing within a bullish channel (black dotted lines), which is backed by SoFi’s rising 50-day (blue) and 200-day (red) moving averages.
Time to Get Bullish?
Based on this bullish price action, I’m long the stock once again. I still feel that SoFi is more of a trading stock, rather than a long-term investment. Then again, SoFi shares have gained 110.75% over the past year, so I could be wrong.
Where is SoFi stock headed? Let’s zoom out to the weekly chart for the answer.
SoFi’s next major resistance point is $18.00 (point A). This is the stock’s 2025 high, set in January.
After that, SoFi’s next resistance level is just below $25 (point B). Several rallies peaked in that area in 2021.
We’re long SoFi once again for a trade. This stock can lay dormant for weeks, and then make an explosive move in either direction, so SoFi investors should be prepared for any contingency.
At the time of publication, Ponsi was long SOFI.
