Affirm Holdings (AFRM) is a financial lender of installment loans that consumers can use at the point of sale to finance a purchase. The action went public in January 2021 and we reviewed the action on November 16 where we wrote, “In our September 30 review, we recommended that ‘first raise stop at $105 instead of $69 $. Our price targets are $165, then $189.”
I hope traders took profits at $165 or more. Raise stops on your remaining longs to $135 from $105.” Price reached our stop level in the second half of November, so traders should have exited their remaining longs.
Let’s check the AFRM again.
In this daily AFRM bar chart below, we can see that prices continue to decline in January. The AFRM is trading below the descending 50-day moving average line and below the 200-day limit line. The On-Balance-Volume (OBV) line shows weakness from October and tells me that AFRM sellers have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is well below the zero line, but is approaching a cover short buy signal.
In this AFRM weekly Japanese candlestick chart below, we can see a chain of red candles with a large red candle breaking below the 40-week moving average line. Trading volume declined, as did the weekly OBV line. The MACD oscillator is pointing to the zero line.
In this AFRM daily point and pattern chart, below, we can see an upward price target of $108, but we also see that resistance can be seen at $93 and higher.
In this AFRM weekly Point and Figure chart, below, we can see a bearish price target of just $9. Ouch.
Background strategy: AFRM might bounce from oversold $10 to $20 but the trend is down and a new basic pattern has not formed. I try to find trends that are worth buying that don’t bounce in downtrends. I would pass on AFRM purchases at this point.
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