On Wednesday, news that SoFi Technologies Inc. (BMV:SOFI) had received approval from the Office of the Comptroller of the Currency and the Federal Reserve to purchase Golden Pacific Bancorp Inc. and hence become a bank holding company sent social media traders into a frenzy.
As a result, on Wednesday morning, the stock began nearly 20% higher, before closing up 13.7% on nearly six times its typical volume. According to social media usage tracker, HypeEquity; mentions of SoFi’s ticker on Reddit increased by more than 1,500% in just 24 hours.
SoFi’s massive trading volume and social media attention make it very meme-like. We all remember last year’s meme stock frenzy and hype, don’t we?
Is SoFi a “Must” buy?
The Moving Average Convergence Divergence (MACD) for SOFI turned positive on January 20, 2022, after the announcement of the acquisition deal. Looking at past instances where SOFI’s MACD turned positive, the stock continued to rise in 10 of 11 cases over the following month. This means that the odds of a continued upward trend are 90%.
Source – TradingView
SoFi’s current price of $13.50 crossed the resistance line at $22.11. As a result, the stock has been trading between the $22.11 resistance level and $9.00 support level. Throughout the period of 12/17/21 – 01/20/22, SoFi’s price experienced a +2% Uptrend. And during the week of 01/12/22 – 01/20/22, the stock enjoyed a +8% Uptrend growth.
If you look at the technical analysis of SoFi stock, it is the very evidence that SoFi is bouncing back on an upward trajectory. As a result, SoFi is a must buy right now. In fact, many analysts expect that the stock will continue skyrocketing, and in a few months, it might test its resistance level at around $22.
Should you buy SoFi stock right now?
Some short sellers have been trying to attack SoFi, as a result the stock had a 7% drop by the end of the intra-trading day on Friday. As a result of attacks from shorts, some investors are sceptical that SoFi might drop to $10, which is below its resistance levels. However, I wouldn’t consider a drop below $10 to be a “game-over” situation. In fact, I would see it as a golden chance to add to my position. With that in mind, investors should buy SoFi right now at $13 and continue adding to it during the dip, and there’s no doubt they will reap a big reward when the stock rallies again.