During Wednesday's Lightning Round segment of Mad Money, Jim Cramer fielded questions about stocks from his viewers. One caller asked about Affirm Holdings (AFRM) : "This is a good company. I think they're smart and I'm a buyer below $56," was Cramer's take.
The company is a financial technology company in the field of installment loans for consumers to use at the point of sale to finance a purchase.
The name is new to me, so let's check out the charts.
In this daily Japanese candlestick chart of AFRM, below, we can see the entire history of trading. Prices are down from their IPO start. Prices are trading below the 20-day and 50-day moving average lines. The trading volume increased in May when prices made a low.
The On-Balance-Volume (OBV) line has turned lower this month, telling us that sellers of AFRM are still more aggressive than the buyers. The Moving Average Convergence Divergence (MACD) oscillator is close to crossing below the zero line for a sell signal.
In this daily Point and Figure chart of AFRM, below, we can see a potential downside price target in the $53 area.
In this weekly Point and Figure chart of AFRM, below, we can see a downside price target in the $44 area.
Bottom line strategy: AFRM may be a buy from a fundamental perspective, but the charts suggest things could get a lot cheaper in the weeks ahead.
