Bullish or bearish in SoFi Technologies stock?
It’s been a stock defined by unnecessary roughness. I’m talking about Sofi Technologies (NASDAQ:SOFI) and SOFI shares. But beyond the first quarter of play, can SOFI’s bulls regain control of the game?
Let’s look at what the bears, bulls, and action say on the SoFi Technologies price chart, and then offer a risk-adjusted determination aligned with those findings.
If misery loves company, there’s plenty for SOFI stock investors to match this year.
From fintech peers To block (NYSE:SQ) Where PayPal (NASDAQ:PYPL) to peg investors into blue-chip leaders, the market’s Roaring Twenties bull cycle has been turned upside down in the past three months.
But the combination of conflict in Eastern Europe, inflation and interest rate worries, Covid-19 and prolonged risky trading for higher multiple growth games has been particularly challenging for investors. SOFI shares.
Stocks are down almost 45% in 2022 and are just back from an all-time low. And a large-cap valuation of $18 billion reached last November has been relegated to a second mid-cap valuation of around $7 billion.
So what went wrong?
Bears on the Nine in SOFI Stock
There’s the aforementioned broader market fundamentals that helped drive SOFI stock down to around $9 per share, or more accurately, the nine-year line in a game won by the bears.
But there are also other possible bearish apprehensions with SoFi Technologies.
Some bearish or less positive investors like hedge funds Baron FinTech Fundwhich closed its stake in SOFI in the fourth quarter of last year’s game, reacted to intensifying competition and rising customer acquisition costs for consumer-facing fintech companies.
Then there is Morgan Stanley (NYSE:MRS). Just yesterday, the investment bank cut its price target from $18 to $10 while downgrading stocks from overweight to equal weight.
The outfit cited the likelihood of an extended extension of the federal student loan moratorium set to expire in May. If correct, the impact is negative for SoFi as it negates a catalyst close to refinancing revenue.
The banker is also worried about a slow start to SOFI stock’s home lending business in the face of a tougher housing market.
However, not everyone is bearish on SOFI stocks.
First and Nine for the Bulls?
Looking for Alpha Contributor Stone Fox Capital notes that current SOFI stock prices are completely unwarranted, with the stock trading at just 5x its full-year sales while maintaining a 50% growth rate. Additionally, even if Morgan Stanley proves more correct than not, SoFi’s strong digital ecosystem offers other growth drivers.
The bulls are backing a new banking charter and SOFI stock’s differentiating technology and payment processing platform, Galileo, which operates other neobanks, are two important catalysts for stocks.
And as a former hedge fund manager and CNBC personality James Cramer insisted earlier this week SoFi CEO Anthony Noto is just the guy to get the job done.
SOFI Stock Bulls take control of the game
Click to enlarge
The illustrated weekly view of SOFI stock shows two bull breakaways over the past few weeks as they attempted to reverse SoFi’s bear market from a few double bottom moves.
Worse perhaps, the upside equity reversal failures occurred despite support from a fairly attractive Stochastic setup each time.
Today, and after hitting an all-time low of $7.74, stocks are back near the nine-meter line, or the $9 level, as the bulls fend off the bears so they don’t not reach the end zone.
The stock looks promising. But for those who are optimistic about SoFi’s business prospects and perhaps considering the possibility of buying a growth story at a very favorable price, a third confirmation could prove charming and worth waiting for.
On the weekly stochastics and the candlestick, both signaling a reversal pattern, I would also suggest following a sell or married collar strategy on SOFI stocks to ensure a great offensive play is equipped with an equally strong defense .
As of the date of publication, Chris Tyler holds long positions in SoFi Technologies (SOFI) (directly or indirectly), but no other positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.