SoFi and 2 More Dips to Buy After Market Pullback

Stocks have pulled back over the past few sessions. While traders never enjoy seeing red on their screens, maybe it’s not a bad thing that markets are taking a breather.

On Wednesday, the two-day pullback caused two major stock indexes to nearly reach their respective 10-day exponential moving average (EMA, blue). The S&P 500 (left chart, below) and the Nasdaq Composite (right chart, below) bounced (black arrows) when that indicator came into view. Both indexes also bounced when they encountered that indicator on September 17 (green arrows).

A "fast" indicator like the 10-day EMA can be used to enter pullbacks on powerful trends. We recently used the 10-day EMA on a trading setup for gold. You can read about it here. 

When trends are strong and pullbacks are shallow, as is the case now, a pullback to the 10-day EMA might create a good opportunity to enter new positions, or add to existing positions.

Here are three names that are ripe for investors to buy on a dip to the 10-day EMA. 

1. SoFi Technologies

Here's how traders looking to enter or add to SoFi Technologies  (SOFI)  could use the current pullback to their advantage (read our latest analysis on SoFi here).

SoFi reached an all-time high on Monday, when it traded above $30 for the first time ever. SoFi hasn’t yet reached its 10-EMA on this pullback, an indication that this stock is stronger than the broader market. 

SoFi has also seen a dip in volume on this pullback (shaded yellow). This is a positive sign, as it indicates that sellers aren’t being overly aggressive here. 

This is what some traders refer to as an "orderly pullback." If SoFi falls to about $28, the location of its 10-day EMA (blue), it would create a nice entry point.

2. Oklo

Oklo Inc.  (OKLO) , a Santa Clara-based provider of nuclear power plants, fell by about 8% on Wednesday after closing at an all-time high on Tuesday. Oklo will need a deeper pullback to reach its 10-day EMA, which is currently located near $116.

Oklo shares have climbed 522% year to date. You can read more about Oklo here.

3. Robinhood Markets

Pullback? What pullback? Apparently, Robinhood  (HOOD ) didn’t get the memo. The Menlo Park, California-based retail brokerage closed at yet another all-time high on Wednesday.

Investors should consider long positions in Robinhood if the stock drops to the $121 area. Check out our latest analysis on Robinhood here. 

At the time of publication, Ponsi was long SOFI, HOOD and OKLO.