SoFi Technologies (SOFI) has been on fire -- and while a bit of that bullish momentum carried into Monday’s session, it has eased.
The shares were up as much as 8.1% on the day, but are now up 3% on the session.
Still, that shouldn’t take away from the stock’s recent momentum. SoFi rallied 30% last week, is riding a two-week win streak, and is up more than 60% from its low on May 15.
Don't Miss: Apple Stock at Record Ahead of WWDC. Can It Continue Higher?
What's driving the stock?
Broadly speaking, the recent price action in growth stocks has been encouraging. Investors often use the ARK Innovation ETF (ARKK) as their proxy for growth stocks and that ETF just had its first close over the 50-week moving average since September 2021.
More specifically speaking, the debt-ceiling negotiations and its impact on student loans is being viewed as a positive for SoFi Technologies.
Trading SoFi Stock
Chart courtesy of TrendSpider.com
Take a look at Monday’s high in SoFi stock. That figure currently stands at $7.60, which happens to be the 78.6% retracement of the 52-week range. How fitting for shares to rally to this level and fade considerably.
That said, the price action doesn’t necessarily translate to bearish. Instead it suggests that the shares may simply need a bit of a break.
SoFi stock gapped over the 50-day and 200-day moving averages on May 30, then exploded over downtrend resistance the following day. Although volatile, the shares have continued to press higher.
Don't Miss: Does Broadcom Stock Still Have Upside After Wild Price Action?
On a pullback, I’d like to see the $6.50 area hold as support, alongside the 10-day moving average.
If this area fails, the shares might correct down toward the $5.50 to $5.75 area, where they'll find the 50-day and 200-day moving averages, as well as the 61.8% retracement.
On the upside, look for a move over $7.60. That could open the door up to $8, which has been an area of resistance for more than a year now.
If SoFi stock pushes through $8, the 52-week high at $8.52 is in play.
