Affirm Holdings Inc. (Affirm stock) price has been volatile with major ups and downs in the past 3 months and trading in a range with resistance at $20 and support at $13. The buyers and sellers seemed to have a tough fight in the range with none dominating the overall trend.
The AFRM stock had been in a strong declining trend which seemed to end in May 2023 as the price bottomed out hitting a low of $8.62. Since then, the buyers have been in a dominating position in the short term.
Recently, the stock price showed bearishness after forming a double top and sellers aggressively shorted as per the options data. The price declined till the previous support zone and consolidated at the lower levels to wait for the results. The earnings came out on Thursday which led a positive sentiments that led to a short covering in the stock and the price hiked by 28% on Friday with a massive volume.
The Affirm Holdings Company disclosed the quarterly results on Thursday with revenue up by 22% year over year to $445 Million beating the forecasts by $40 Million. Its Net loss widened from $186 Million to $206 million but still outperformed the estimates by 20%.
Affirm’s stock price was at $17.79 and has gained 28.87% of its market capitalization during Thursday’s trading session. The Company is growing but still struggling to make its business model sustainable. Even after its post-earing gains, the stock remains nearly 51% below its IPO price in January 2021.
Affirm stock option-chain analysis states that the current implied volatility in the market is 77.41% with a decrement of 19.12% in the last trading session. The nearest resistance strike price of $18 has 159 open contracts on the put side and 3,421 open contracts on the call side indicating sellers are still present in large quantity and again a short covering may be observed if the price manages to close near the upper level on Monday.
AFRM Stock Price Rises 28%, Will The Rally Continue?
The Affirm stock price currently trades at $17.79 and surges after forming a triple bottom pattern. The analysts say that the price is still trading below its major resistance of $20. Now, if the price continues with the same momentum to break above the $20 level then it may lead to a short-covering among the sellers, and the price may continue with the ongoing trend.
The Daily Chart Shows the breakout of 50 EMA
The daily AFRM stock price chart shows that the price is trading above 200 and 50 EMA indicating the domination of buyers in the short term.
The overall Technical Opinion rating including RSI and MACD is signaling an 80% buy with an average short-term outlook on maintaining the current direction.
Conclusion
Affirm Holdings Inc. (Affirm stock) price surged 28% on Friday after reporting a strong quarterly result, beating the forecasts. The revenue was up by 22% year over year, and the net loss was lower than expected. The stock price has been trading in a range between $13 and $20 and formed a triple bottom pattern. The analysts say that the price needs to break above the $20 level to continue the uptrend, or it may face more selling pressure. The stock is still 51% below its IPO price.
Technical Levels
Support levels: $13.57 and $11.28.
Resistance levels: $20.08 and $22.16.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Source: https://www.thecoinrepublic.com/2023/08/28/affirm-stock-soares-28-on-friday-can-afrm-stock-rally-more/