With a new game just underway the scoreboard in SoFi Technologies (NASDAQ:SOFI) reflects the bears as in control. But is there a chance for bulls to launch a successful offensive campaign in SOFI stock?
Today let’s look at what’s happening off and on the price chart of SOFI, then offer a practical, risk-adjusted play so bullish investors can profit from a stronger field position, while avoiding future sacks.
It hasn’t been pretty for most SOFI stock bulls. Shares of the large-cap, fintech did finish 2021 up 26%. But SoFi also finished in the lower quartile of its yearly range while forfeiting field position of just over 35% in the fourth quarter.
Waiting for SOFI Stock
That’s not exactly a championship performance, though it did top the Nasdaq’s gain of 21%.
Some SoFi investors may be comforted seeing the bright lights of LA’s SoFi stadium shine if they’re fans of the Los Angeles Rams, Chargers or both.
And to be fair, compared to other growth fintech plays such as Block, Inc (NYSE:SQ), PayPal (NASDAQ:PYPL) and Stoneco Ltd (NASDAQ:STNE) which got sacked for huge losses last year, SOFI proved a bullish standout.
Still and since coming public last year, being a fan of the Social Capital-backed SPAC hasn’t been easy. The fact is most SOFI stock bulls are underwater despite what last year’s scoreboard shows.
Of course, a broad rotation out of growth stocks during both halves of 2021 is largely to blame for the muted cheers by some and more vocal jeers from most SOFI stock investors.
But the waiting game for a street not always known for having patience has also hung over SoFi Technologies.
Specific to SoFi, a key banking charter whose approval is largely seen as a when not if situation, has nevertheless taken longer than many originally anticipated.
And in today’s more challenging environment, time is the enemy. And that’s certainly the case for SOFI and whose banking license may not happen until the second half of 2022.
SOFI’s Weekly Price Chart
Source: Charts by TradingView
The question right now is whether a cheaper SOFI stock finally offers enough value to be purchased?
Off the price chart, a buy offers the chance to own the company’s robust digital-first ecosystem, B2B neobank platform and lending arm growth narratives where execution has been rock solid.
Investors also have the strong promise of an even larger financial reach later this year if SOFI’s widely-expected banking license is approved.
As well, today’s investors can also become shareholders at levels last seen more than a year ago.
But the SOFI stock price chart is strongly warning otherwise.
The illustrated weekly chart of SoFi Technologies reveals, shares have just confirmed a bear flag set against key resistance.
Moreover, with the pattern breaking the 76% Fibonacci level, sporting a bearish stochastics setup and after significant cup, double-bottom and triangle failures, the real possibility of SOFI revisiting its all-time-lows near $10 is growing.
Bottom Line
SOFI stock has a lot working in its favor. Importantly though, the homefield advantage is the bears on the price chart. And right now there’s no indication of the bulls challenging that.
If investors are adamant about owning shares today, a fully-hedged collar strategy with its ability to adjust its risk profile based on real-time trading conditions, is a much smarter way to suit up in SOFI stock.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
