• 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
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Affirm's Bounce Fails to Impress Me

Don't expect AFRM to rally for long or go very far.
By BRUCE KAMICH
May 13, 2022 | 08:45 AM EDT
Stocks quotes in this article: AFRM, SHOP, WMT, AMZN

For his second "Executive Decision" segment of Thursday's Mad Money program, Jim Cramer spoke with Max Levchin, founder, chairman and CEO of Affirm Holdings (AFRM) , the buy now, pay later provider.

After a long decline, the shares spiked 23.3% Thursday after the company reported another quarter of strong results.

Levchin said consumers are still alive and well and are spending, and paying, according to Affirm's plan. "The business is performing very well," he said.

Affirm has a number of great partnerships, Levchin added. Their most recent tie-up with Shopify (SHOP)  has been "fantastic," while older deals with Walmart (WMT)  and Amazon (AMZN)  also remain strong.

Levchin noted that Affirm has never charged consumers a penny in late fees or deferred interest, instead choosing to work out new payment plans for delinquent buyers. 

When asked about investor fears that rising interest rates could derail Affirm, Levchin said the company's cost of capital is still lower than 2019 levels, and their delinquencies are also around 2019 levels. 

OK, let's check on the charts. 

In the daily bar chart of AFRM, below, we can see that the shares have been in a gut wrenching decline from November. Prices are rebounding a bit now but a lot of damage has been done and very little in the way of repair or new base building. Prices are trading below the declining 50-day moving average line but we could see a test of the underside of that line in the days ahead. The slope of the slower-to-react 200-day moving average line is negative.

The daily On-Balance-Volume (OBV) line has been weak for a long time telling us that sellers of AFRM have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is bearish and pointed lower. 

 

In the weekly Japanese candlestick chart of AFRM, below, we see a mostly bearish picture. The shares are in a downtrend and trade below the declining 40-week moving average line. The latest candle pattern shows a lower shadow telling us that finally after this long decline, traders are starting to reject the lows.

The weekly OBV line remains bearish for now. The MACD oscillator is bearish but the two moving averages are narrow and we could see a positive crossover in the weeks ahead. 

In this daily Point and Figure chart of AFRM, below, we can see that the shares reached and exceeded a downside price target. 

In this weekly Point and Figure chart of AFRM, below, the software is projecting the worst -- a downside price target of $0 -- zero. I am just the messenger. 

 

Bottom-line strategy: AFRM got crushed and is now bouncing a bit. Without a bottom pattern in place I do not expect AFRM to rally for long or go very far. Only nimble and experienced traders should buy AFRM for a very short-term trade. The rest of us should remain on the sidelines.

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: Earnings | Investing | Stocks | Technical Analysis | Financial Services | Fintech | Software & Services | E-Commerce | Mad Money | Executive Interview

More from Stocks

Meta Platforms: I'm Looking at the Charts, Not the Headlines

Bruce Kamich
May 24, 2022 2:30 PM EDT

Buyers have been attracted in the $180 area in March, April and now.

Boston Scientific Could Be Wicked Good in This Kind of Market

Brad Ginesin
May 24, 2022 2:13 PM EDT

Here's why this healthcare stock is a potential port in the storm for investors.

Bettin' a Buck on Devon

Mark Sebastian
May 24, 2022 1:39 PM EDT

Here's where I see Devon Energy going and how to play it.

For Those Keeping Score of Failed Bounces in May, We're Up to 4

James "Rev Shark" DePorre
May 24, 2022 10:58 AM EDT

The essence of a bear market is failed bounces, and we have an epic one here on Tuesday.

Should You Buy a Retest of Trade Desk's Low?

Bruce Kamich
May 24, 2022 10:41 AM EDT

Here's what the charts tell us.

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

  • 02:24 PM EDT PAUL PRICE

    An Interesting Chart

    I'm betting heavily that stocks will be way up aga...
  • 10:10 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "Market Timing for Dummies"
  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 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