To The Moon

As of late August 2025, $SoFi Technologies Inc.(SOFI)$ has experienced a significant run-up in its stock price, leading many to question if it is overbought and what its future trajectory might be. The recent pullback can be seen as a natural consolidation after a strong rally.

SoFi’s recent pullback is stirring up a lot of debate, and it is a textbook case for multi-layered analysis. In this article, I would like to share my thoughts as I hold a long-term position on SoFi and how I planned to trade SoFi using option at the end of this article.

Is SoFi Stock Overbought?

Determining if a stock is "overbought" is subjective and often relies on both technical indicators and fundamental analysis.

Short answer: Not quite yet—but it’s dancing near the edge.

Momentum Metrics: SoFi’s Momentum score is a scorching 96.98, and its Growth score is 95.83, signaling strong recent price action and operational expansion.

Price Action: After rallying 135% off its April low, SoFi hit a 52-week high of $25.11 before pulling back to ~$22.58. This is still well above its April low of $8.60.

Technical Setup: Elliott Wave analysis suggests SoFi is in wave 5 of (1), targeting $26.21–$28.01 before a deeper correction. As long as it holds above $20.43, the bullish structure remains intact. SoFi's stock has surged, with a new 52-week high recently. Technical analysis reports indicate that the stock is in a "rising trend channel" in the medium term, with buy interest increasing.

Valuation Flags: Forward P/E is hovering around 69, and price-to-sales is near 9, which is rich compared to traditional banks. This doesn’t scream “bubble,” but it does suggest limited room for error. However, its price-to-earnings (P/E) and price-to-sales (P/S) ratios have become stretched compared to historical averages, suggesting a high valuation relative to its current fundamentals. This could signal that the stock is technically overbought in the short term.

How to Trade SoFi: Tactical Playbook

1. Buy-the-Dip Strategy

• Wait for a pullback into the $20–$21 zone.

• Look for confirmation via RSI divergence or volume deceleration.

• Target the $26–$28 zone for swing exits.

2. Volatility Plays

• Long Straddle: Buy Nov 21 $20 call and put. Net debit ~$5.98. Profit if SOFI moves >15.4% up or >37.7% down.

• Long Strangle: Buy lower-strike call and put with same expiry. Cheaper entry, but needs bigger move.

3. ETF Overlay

• SoFi’s crypto remittance rollout could benefit fintech ETFs like ARKF, FINX, and BLOK.

• Consider pairing SoFi exposure with thematic ETF allocations to hedge dilution risk and capture broader upside.

4. Macro-Responsive Rotation

• Fed’s dovish tone at Jackson Hole is bullish for growth stocks like SoFi.

• If rates ease, SoFi’s funding costs drop and valuation multiples expand—ideal for barbell sleeve exposure.

Strategic Considerations

Dilution Risk: The $1.5B public offering spooked investors, but it also strengthens SoFi’s balance sheet for expansion.

Crypto Catalyst: The Bitcoin Lightning Network integration is a bold move into blockchain-powered remittances.

Institutional Tailwinds: Inclusion in MSCI ACWI Index and analyst upgrades (Citi: $28 target) suggest growing institutional interest.

In the next section, I would like to show how we architect a dynamic dashboard that blends SoFi’s technical momentum, macro overlays, and option setups into a cohesive, actionable framework.

SoFi Tactical Dashboard

1. Return Cone Simulation

Cone shape shows convexity: upside tails are fatter due to momentum and ETF inflows, while downside is capped by retail support near $18.

2. Technical Momentum Tracker

3. Macro Overlay Panel

4. Options Trade Setup

Strategic Layer

• Rotation Heatmap: SoFi is outperforming fintech peers like SQ, PYPL, HOOD. Consider a barbell sleeve with SoFi + ARKF + BLOK.

• Consulting Angle: If pitching this to clients, frame SoFi as a case study in crypto-fintech convergence, with optionality from macro and thematic ETF flows.

Analysis on How Investors Can Trade SoFi

Trading SoFi involves understanding the different time horizons and risk appetites.

For Short-Term Traders

Short-term traders can capitalize on the stock's volatility and technical patterns.

Support and Resistance Levels: After the recent pullback, traders should identify key support levels where the stock has previously found a "floor." Recent technical analysis suggests a support level around $18.00. The stock has broken through a previous resistance at $21.78 and met its objective. A new resistance level is now at $30.00.

Momentum Trading: If the stock breaks above its recent high with strong volume, it could signal a continuation of the rally. Conversely, a break below a key support level could indicate a deeper pullback.

Monitoring News and Sentiment: News regarding partnerships, product launches, or analyst ratings can cause sharp intraday swings. A change in sentiment from positive to negative on social media or in financial news could also lead to a quick downturn.

For Long-Term Investors

Long-term investors should be less concerned with short-term price fluctuations and focus on the company's fundamentals and long-term strategy.

Growth Story: The long-term investment thesis for SoFi is its transformation from a lending company to a comprehensive financial "super app." Investors should monitor user growth, product diversification, and the cross-selling of its services.

Path to Profitability: A key concern for long-term investors is SoFi's ability to sustain profitability. After achieving net income in Q2, the focus will be on whether the company can maintain and grow its profits. Look for trends in revenue per user, margin expansion, and a decrease in operating expenses relative to revenue.

Competitive Landscape: The financial technology (Fintech) space is highly competitive. Long-term investors need to evaluate how SoFi's business model and unique offerings, such as its bank charter and integrated platform, will allow it to compete with both traditional banks and other fintech startups.

Summary

SoFi may not be "overbought" despite its recent price surge due to several fundamental factors. The company has a strong growth narrative centered on its "financial super app" strategy, which is attracting new members and driving cross-selling of its products. Its Q2 2025 earnings showed record revenue and, for the first time, net income, demonstrating its path to profitability. Analysts have been raising their price targets, and the company's valuation is seen by some as justified by its high growth rates and expanding business.

Trading SoFi short-term using options can be feasible due to its inherent volatility. The stock's significant price swings create opportunities for both bullish and bearish plays. Traders could use options to leverage a directional move or to generate income. For example, a bullish trader could buy calls if they expect a rebound from the recent pullback, while a more cautious trader could sell puts to capitalize on the stock's premium and potentially acquire shares at a lower price. This strategy allows traders to manage risk and participate in SoFi's price action without holding the underlying stock.

Appreciate if you could share your thoughts in the comment section whether you think SOFI would continue to push higher despite some volatility in its share price trading.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.