PreMarket Prep Stock Of The Day: SoFi's Upgrade Rally

With a muddled macroeconomic and geopolitical environment along with inflation concerns, not as much attention is being paid to upgrades and downgrades by Wall Street analysts.

Yet an upgrade by Piper Sandler of SoFi Technologies Inc. SOFI has the issue trading higher for the fourth day in a row. 

SoFi's Rough Year: After a volatile 2021, with a range from a January low of $11.80 low to an all-time high in February at $28,26, SoFiretreated to end the year at $15.81. The issue peaked just above its year-end closing price this January at $16.47 and made its all-time low May 10 at $4.82.

A three-day rally off that depressed level lifted the issue to end the week at $6.75.

The SoFi Upgrade: Before the open Monday, Piper Sandler analyst Kevin Barker upgraded the company from Neutral to Overweight. Yet Barker did lower the price target from $12 to $10. Barley first initiated coverage of the issue on March 7 with a Neutral rating. The issue ended that session at $9.62.

SoFi Price Action: After a higher open Monday, SoFi continued in that direction, reaching $7.24, and reversed course. The ensuing decline found support just under the top of Friday’s range ($6.86), falling to $6.84. It rebounded off that low and traded actively at the $7 area.

The stock ultimately gained 2.37% Monday, closing at $6.91. 

SoFi Moving Forward: From last week's all-time closing low price of $5.25 to the price of $7 represents a tidy gain of 33% in a very short period of time. Therefore, if taking a long entry at this point, investors could consider “chasing it” after the quick burst off the low. They must be repared to hold through a retreat, though it still may be a good entry if a much higher target price is expected.

In addition, the issue stalled just above this area earlier in the month, when it put in a pair of daily highs at the $7.15 area and was unable to hold. Of course, that was before the major indexes put in place what could be a short-term (or long) bottom on Thursday.