• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Affirm Holdings' Charts Offer Little Affirmation of What's Ahead Post Earnings

A rally in the shares could occur in the short run, but without a strong base pattern there could be weakness down the line.
By BRUCE KAMICH
Feb 09, 2022 | 08:29 AM EST
Stocks quotes in this article: AFRM

Affirm Holdings Inc. (AFRM)  provides payment platforms for digital and mobile commerce and is scheduled to report its fiscal second-quarter results after the close of trading Thursday. 

 
In our Jan. 12 review of Affirm we wrote, "AFRM could make an oversold bounce of $10 to $20, but the trend is down and a new base pattern has not formed. I try to find trends that are worth buying and not bounces in downtrends. I would pass on purchases of AFRM at this point in time." 
 
Let's have another look at Affirm's charts. 
 
In this updated daily bar chart of AFRM, below, we can see that prices made a low in January. AFRM has bounced slightly but remains well below the 50-day and 200-day moving average lines. The slope of the 50-day average is negative and it is crossing below the 200-day line now for a bearish dead or death cross sell signal. Obviously, this sell signal comes very late. The trading volume increased in January and could mean we saw a change of ownership from weak hands to stronger hands. The On-Balance-Volume (OBV) line shows some improvement from late January. The 12-day price momentum study shows a higher low from December to January for a bullish divergence. 
 
 
In this weekly Japanese candlestick chart of AFRM, below, we have an interesting pattern, or should I say patterns. One interpretation of this chart would be to suggest that prices made a possible hammer formation in the middle of January. Maybe. I would note that the lower shadow is not two to three times the size of the real body and really doesn't conform to the correct view of the pattern. Another pattern that might be playing out is a falling three methods. This pattern is found in a downtrend and is a temporary counter-trend rally. The pattern shown below is not picture perfect but it could work in the end. Meanwhile, the western technicals show that prices are below the 40-week moving average line and the weekly OBV shows a lift. The Moving Average Convergence Divergence (MACD) oscillator has begun to narrow.  
 
 
In this daily Point and Figure chart of AFRM, below, we can see a potential upside price target of $103.
 
 
In this weekly Point and Figure chart of AFRM, below, we see the bears have control of the X's and O's and a bearish price target of just $9 is projected. 
 
 
Bottom line strategy: I have no special knowledge of what AFRM is going to report for earnings on Thursday but I have a strategy for nimble traders. In the short run I believe AFRM can rally to the $80 area. The daily Point and Figure chart suggests a rally to $103 but that may be ambitious. Without a strong base pattern in place I cannot rule out renewed weakness later in the year, but a price target of $9 seems too bearish at this point in time. 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Fintech | E-Commerce | Real Money | Earnings Preview

More from Stocks

5 Factors to Watch in an Oversold Bounce

James "Rev Shark" DePorre
Oct 4, 2023 11:35 AM EDT

If you're stalking a counter-trend upswing in the market, then pay attention to how these scenarios play out.

Apple to the Core: Is It Better to Reduce Than Add Here?

Stephen Guilfoyle
Oct 4, 2023 10:45 AM EDT

The firm's products are profitable, but they are just the key. The key that unlocks much higher margin businesses elsewhere and going forward.

What's Next for Bank of America as the Charts Turn Ugly?

Bruce Kamich
Oct 4, 2023 9:50 AM EDT

Future declines may be likely.

The Uglier Equities and Economic Conditions Get, the More Conservative I Become

Bret Jensen
Oct 4, 2023 9:30 AM EDT

My portfolio definitely isn't sexy as it is focused more on preserving capital than aggressively trying to grow it.

Tom Lee: When a Trade Becomes Obvious, That's Often When the Trend Can Reverse

Tom Lee and the FSI Team
Oct 4, 2023 9:15 AM EDT

Is this becoming a 'single issue' market singularly focused on yields? That will eventually change, but the turning point seems a bit away.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:13 PM EDT BRUCE KAMICH

    8 Trading Rules from T. T. Hoyne

    You just read the header for this missive and prob...
  • 08:42 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How Elite Traders Make Big Profits
  • 02:58 PM EDT BRUCE KAMICH

    Classic Trading Rules From Bernard Baruch

    Bernard Baruch listed the rules (below) in his aut...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login