Making the 'Right Size' Move With SoFi

I know that a lot of you are knee-deep in SoFi Technologies  (SOFI)  and that is very likely because you followed me in. Now, if you're in SOFI with me from the beginning, then you're still up, at least from your initial entry — more than 200%. However, if you are newer and entered the stock only at the start of this calendar year because I had named it my stock pick for 2026, then you likely have a different opinion.

My OGs are playing with house money in this name. You wonderful folks are down 17.9% if you have done nothing to address the stock's early 2026 behavior. This is why we have rules such as my 8% rule that governs losses when there are mistakes made. I have been asked by a new reader to go over the 8% rule, and how to act at price targets, add levels and panic points.

Not everyone has been doing this for decades and not everyone trying to do this now, did this occupationally. So, at some point this week, in one of my Market Recon columns, we'll do some remedial work and instead of focusing on making money from the viewpoint of aggression, we'll go through how I manage equity risk, ex-options. 

We'll do options in another class at another time. We have to make sure that the new kids and the scared kids (that's not an insult, everyone has been there) know how to defend themselves first.

What Now?

Because I do not run a blog or a daily diary and only write up to three articles a day, it would stand to reason that the vast majority of my trades are not available for public consumption. I sometimes make two or three trades in an entire day. If I need to make some dough, however, I execute 200 to 300 trades in a day. 

Day trading is not the hardest job in the world if one trades the right vehicles, but it is no fun at all. I prefer to not have to rely upon that at the end of a month, so I don't unless I have to.

Last Wednesday, in regard to SOFI, I wrote... "While I would feel foolish making a sale on the ninth day of a sell-off, my code of discipline demands that I act at both target prices and panic points. Therefore, should SOFI fail to take back its 200-day SMA, I will be forced to lighten up, probably taking off the portion I took on last Friday for a LIFO loss that would still be a sizable FIFO gain."

Hence, the stock did not take back the 200-day line that day, and I took off a portion as I said I would. The next day, Thursday, SOFI gave up another 6.2%, bottoming at $19.19. That seems like common sense, but was risky at the time, except for the fact that so many stocks were oversold by Thursday afternoon that it felt like the pros were about to pick off the masses. Hence, I added the portion sold on Wednesday and added a like number at the close.

I admittedly became over-exposed to SOFI, but intentionally as a large proportion of my current long position was meant to be short-term. Friday, the stock ran 7.2% in our favor, so far on Monday, the stock is up another 3%, as I write. 

It may not be easy, but the time is now, while we have short-term profits, to return this stock to a reasonable weighting within the "Sarge-folio."

The Chart​

Do I think that the stock will make an effort to ​run at its 200-day simple moving average (SMA)? Yes, I do. Why would I sell some? I am over-exposed and this is basic risk management. SOFI will still be my largest holding in terms of weighting after this move, but I won't be in as much trouble if I am wrong again, when positioned this way.

Positively, the reading for Relative Strength (above the chart) has left technically oversold territory. The daily MACD (below the chart) is still postured bearishly, but as the histogram of the 9-day exponential moving average (EMA) has started to move towards zero, the 12-day EMA has curled upward. These are the first two things that change when a stock starts to move higher. Remember, even if the 50-day SMA were to drop below the 200-day SMA (death cross), that crossover loses a lot of its virility if the 200-day SMA is rising when it happens.

My price target for SOFI remains $36, at least until a new technical pattern develops that I recognize. Yes, I still see this as a $100 stock long-term.

At the time of publication, Guilfoyle was long SOFI equity.