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SOFI Shows Technical Uptick and Fundamental Optimism, but Caution Advised Amidst Volatility

StockInvest.us, 1 month ago

SoFi Technical Analysis

SoFi Technologies, Inc. (ticker: SOFI) experienced a pronounced uptick in its last trading session on January 22, 2024, closing at $7.92, representing a 5.74% increase from the previous close. This bullish momentum arrived near the lower boundary of its recent trading range between $5 and $10, with the session's high touching $8.33. Despite this, SOFI's Relative Strength Index (RSI14) of 26 indicates the stock is currently in an oversold territory, suggesting potential for a bounce-back in the near term.

However, the Moving Average Convergence Divergence (MACD) value at -0.28 and the current price sitting below the 50-Day Moving Average ($8.13) indicate a bearish signal. The Average True Range (ATR) stands at 5.86, signifying a higher volatility level in the stock's price movement. The next trading day and week could see heightened activity, with a possible trend towards the identified resistance level at $8.17.

SoFi's trading volume on the last close was significantly higher than the average volume, with 68.43 million shares traded compared to the average of 44.48 million. This surge in volume may accompany a potential trend reversal or at least a consolidation as the earnings announcement approaches on January 29, 2024.

Fundamental Analysis

SoFi On the fundamental front, SoFi's impending earnings announcement has generated optimism among investors. Recent news suggests that the company is expected to outperform analysts’ revenue and earnings per share (EPS) estimates for both Q4 2023 and FY2024. If SoFi continues its track record of conservative guidance followed by outperformance, the market may react favorably to the upcoming earnings report.

The market cap of SoFi stands at $7.59 billion with a negative EPS of -$0.45, resulting in a negative P/E ratio. However, analyst ratings show a consensus towards a 'Buy,' with 6 'Buy' ratings and 4 'Hold' ratings, depicting cautious optimism about the stock’s potential growth. Moreover, projections suggest that the company's stock has the potential to triple by 2026, indicating long-term growth prospects despite current undervaluation.

Predictions for Stock Performance

Given the technical and fundamental indicators, SOFI may experience short-term volatility leading up to the earnings release. The oversold condition suggested by the RSI, combined with the surge in trading volume, could lead to price stabilization or potentially an upward trajectory towards resistance levels in the next trading day and upcoming week. However, caution is warranted due to the bearish signals from the MACD and price sitting below the 50-Day Moving Average.

Overall Evaluation

Evaluating the aggregated data and recent developments, the analyst classifies SoFi Technologies, Inc. as a 'Hold' for the next trading session and the upcoming week. While the short-term technical indicators suggest a potential for a temporary upswing following the oversold condition, the cautious optimism from analysts and the anticipation of a positive earnings report may bode well for the future. However, until the earnings results are publicly released and can be evaluated, it is prudent to maintain a 'Hold' position with a vigilant eye on market response and earnings outcomes.

Check full SoFi forecast and analysis here.