After a massive 200% rally from August through January, SoFi Technologies Inc. (NASDAQ: SOFI) looked unstoppable. That momentum carried the fintech stock to a multi-year high at the end of January, supported by a streak of strong earnings reports. But instead of breaking out further, SoFi plunged 20% after its latest earnings report despite once again beating expectations.
The reason? Management's lighter-than-expected forward guidance. Investors, already sitting on huge gains, took the opportunity to lock in profits. But as the past week of gains has shown, the market, in all likelihood, overreacted. The bears have run out of steam, and bulls have rushed back in, pushing shares up 18% in the past five days. With momentum returning and the uptrend resuming, this looks like a textbook buy-the-dip setup for investors who recognize the long-term growth story is still intact.
