SoFi Technologies Inc (NASDAQ: SOFI) was one of the most popular and anticipated IPOs of 2020. After making a debut above $10, the stock quickly rocketed to levels above $25. However, since then its journey has been turbulent.
By the end of 2022, the stock crashed to sub $5 levels and since then has found it hard to cross $10. But, all this while insiders, especially CEO Anthony Noto have been accumulating the stock at these depressed levels. Insiders buying stock in their own company is generally good news for investors as it shows that those running the company have conviction about it doing well in the future.
In a regulatory filing on May 3, Mr. Noto revealed that he had bought an additional 28,775 shares of Sofi for an average price of $6.90, taking his total shareholding in the company to 8,033,369 shares.
But should the company’s CEO buying be one of the major reasons for investors and traders to buy the stock? Apart from company fundamentals and macros, charts also reveal a plethora of information regarding where a stock is headed. So, let’s look at SoFi’s chart to decipher its future trajectory.
The downward move: Led to an unbroken range.
SoFi’s long-term chart shows how the stock struggled to cross above $25 after its IPO and then suffered a massive swift bear trend. Since that bear trend ended, the stock has been trading in a $4.5-$10 range for more than two years now.
The range has become even narrower since mid-2023, when the stock has oscillated between $6.4-$10. For investors and long-term shareholders who have bought the stock in the $4.5-$10 range, there is always a chance the stock can bounce back if it trades above $4.5.
Investors who are looking forward to buying the stock, must avoid that decision unless it crosses above $10 convincingly and closes above it for a week.
The near-term support at $6.4
SoFi’s stock has fallen more than 25% year-to-date and trend indicators are showing that it might be in the ‘oversold’ territory currently. So traders who want to go long the stock can place a low-risk trade here by buying the short at the current $7 level and keeping a strict loss at $6.38. They can take profit near $10 levels.
Traders who are bearish on the stock can play it two ways. Either they can wait for the stock to bounce back once again to $10 level and take a short trade there with a stop loss at $12.8. If the stock starts falling again, they can book a profit between $6.4-$6.5.
Or they can wait for the stock to again fall below $6.4. If it does, the next near-term support is at $4.5, where they can book profits.
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