AFRM trade ideas
RiskMastery's Breakout Stocks - AFRM EditionWelcome to RiskMastery's Breakout Stocks - Stocks with breakout potential.
In this edition, we'll be looking at NASDAQ:AFRM ...
I believe this code is at a point of potential volatility.
If price can hold above $38.01 ... Bullish potential may be unlocked.
My key upside targets include:
- $46.50 (Conservative)
- $61.09 (Medium)
- $77.15 (Aggressive)
If however price falls below $28.81 ... Bearish risk potential may be unlocked.
(My key risk targets - C, M,& A - are as noted on the chart)
Enjoy, and I look forward to being of further service into the future.
If you'd like to connect, feel free to reach out and comment below.
Mr RM | Risk Mastery
Disclaimer:
This post is intended for educational purposes only - Publicly available RiskMastery information & content is not intended to be financial advice in any shape or form. Please do your own research and seek advice from a licensed professional before acting on any of the information contained within this post. This post is not a solicitation or recommendation to buy, sell or hold any positions in any financial instrument. All demonstrated trades are merely incidental to the educational training RiskMastery aims to provide. You are solely responsible for your own investment and trading decisions, of which should be made only according to your own opinion, knowledge and experience. You should not rely on any of the information contained on this site or contained in any RiskMastery material on any website or platform. You assume the sole risk of any trade or investment you elect to make. RiskMastery and affiliates shall not be liable to you for any monetary losses or any other damages incurred directly or indirectly, from your use, reliance or reference of RiskMastery materials, content and educational information. Thank you for your understanding and cooperation - We look forward to working with you into the future to navigate the fine line of trading and investment success.
Affirm Holds Potential SupportAffirm ended 2023 with a sharp rally. Now, after two months of consolidation, some traders may look for further upside.
The first pattern on today’s chart is the $36.12 level, a weekly low from early December. The buy-now-pay-later stock has tested and held that price, which may suggest that buyers are lurking.
Second is the falling trendline that began at of the February 9 high. Notice how AFRM has potentially broken that short-term resistance.
Third, stochastics are trying to rebound from an oversold condition.
Finally, the zone around $39-43 was roughly the peak in August 2022. If prices manage to climb from here, it could represent a more significant instance of longer-term resistance becoming new support.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Important Information
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures or cryptocurrencies); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at www.TradeStation.com . Before trading any asset class, customers must read the relevant risk disclosure statements on www.TradeStation.com . System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and a futures commission merchant licensed with the Commodity Futures Trading Commission (“CFTC”). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association (“NFA”), and a number of exchanges. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services under federal and state money services business/money-transmitter and similar registrations and licenses.
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a member of NFA. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit www.TradeStation.com for further important information explaining what this means.
AFRM Weekly High Tight Flag with highest monthly volumeAFRM showing relative strength. It's up a 100% from it's previous base with a shallow pullback - a classic high tight flag!
Affirm Holdings ($AFRM) Surges but Dips shortly After EarningsAffirm Holdings Inc. (NASDAQ: NASDAQ:AFRM ), a leading player in the booming consumer financing sector, recently unveiled its fiscal second-quarter earnings, sending mixed signals to investors. Despite surpassing revenue expectations and narrowing its losses, the company's stock witnessed a slight dip amidst concerns over its guidance amidst market volatility.
Analyzing the Numbers:
In its latest earnings report, Affirm ( NASDAQ:AFRM ) reported a narrower-than-expected loss of 54 cents per share for the three months ending December 31, significantly beating analyst estimates of a 72 cents per share loss. Moreover, the company's revenue soared by 48% year-over-year to $591 million, comfortably surpassing Wall Street projections of $521 million. Affirm's ( NASDAQ:AFRM ) robust performance was underscored by a 32% surge in gross merchandise volume (GMV) to $7.5 billion, with the new Affirm Card contributing $400 million to GMV.
Market Reaction:
Despite the impressive financial metrics, NASDAQ:AFRM stock experienced a slight 1.1% decline in morning trading following the earnings release. This dip can be attributed to concerns surrounding the company's guidance, which, though above expectations, may not have been deemed sufficient given the stock's substantial 270% surge over the past 52 weeks.
Analyst Insights:
RBC Capital analyst Daniel Perlin remains optimistic about Affirm's ( NASDAQ:AFRM ) growth prospects, emphasizing the company's trajectory, market share gains, and its ability to sustain profitable growth even in an environment of elevated interest rates. Perlin's bullish sentiment echoes broader market sentiment, which views Affirm as a frontrunner in the burgeoning "buy now, pay later" (BNPL) industry.
Future Outlook:
Looking ahead, Affirm ( NASDAQ:AFRM ) provided guidance for the current March quarter, projecting revenue of $540 million and GMV of $5.9 billion, slightly surpassing analyst estimates. This forward-looking guidance will be crucial in gauging the company's ability to navigate through market headwinds and sustain its growth momentum amidst increasing competition and evolving consumer preferences.
Conclusion:
Affirm Holdings' ( NASDAQ:AFRM ) recent earnings report paints a picture of a company poised for continued growth despite market uncertainties. With a solid foundation in the rapidly expanding BNPL sector and strategic expansions into other financial services, Affirm ( NASDAQ:AFRM ) remains well-positioned to capitalize on the shifting landscape of consumer finance. As investors navigate through market volatility, Affirm's ( NASDAQ:AFRM ) ability to execute its growth strategy effectively will be key in determining its long-term success.
Strong Buying Signals - Three White soldiers AFRM is really interesting
1. Three White soldiers
2. MACD is inverting
3. SRSI is low and up-trending
AFRM earnings are coming up as well
Position opened
AFRM 3d Chart, Q1 2024 AFRM, moving like a crypto chart after it's last major sell off last year.
After bottoming and accumulating throughout 2023, it went through a ramp up in Q4 '23 and started 2024 with a retest and is now moving back up.
Similar to SQ, if this doesn't shit the bed in their earnings report, this has room to run to fill gaps through 60. Let's see how this plays out.
AFRM Affirm Holdings Options Ahead of EarningsAnalyzing the options chain and the chart patterns of AFRM Affirm Holdings prior to the earnings report this week,
I would consider purchasing the 37.50usd strike price Puts with
an expiration date of 2024-3-15,
for a premium of approximately $3.57.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Buy Now, Pay Later and Higher For Longer Fed's Rate!The Federal Reserve's policy of keeping interest rates higher for a longer period could potentially have several effects on buy now, pay later (BNPL) companies:
1. **Cost of Capital**: BNPL companies often rely on borrowing to fund their operations and offer financing to consumers. When interest rates are higher, the cost of borrowing increases for these companies, potentially squeezing their profit margins unless they can pass on these costs to consumers or find alternative financing sources.
2. Consumer Spending: Higher interest rates could dampen consumer spending as borrowing becomes more expensive. This could impact BNPL companies' transaction volumes and revenue if consumers are less inclined to use their services due to higher borrowing costs.
3. Default Rates: Higher interest rates may lead to increased default rates among consumers using BNPL services, especially if they are already financially stretched. This could result in higher credit losses for BNPL companies, potentially affecting their profitability and ability to attract financing.
4. Competitive Landscape: Higher interest rates may also affect the competitive landscape within the BNPL industry. If borrowing costs rise for all players, it could level the playing field to some extent. However, companies with stronger balance sheets and access to cheaper financing may be better positioned to weather the higher rates, potentially leading to consolidation in the industry.
5. Investor Sentiment: Investor sentiment towards BNPL companies could be influenced by the interest rate environment. Higher rates may make these companies less attractive compared to other investment opportunities, particularly if their profitability is perceived to be under pressure due to higher borrowing costs and potential impacts on consumer spending.
Overall, the impact of the Fed's policy on BNPL companies is likely to be negative in the short term, as it will increase their costs and potentially reduce consumer spending.
The effects of the Federal Reserve's policy on BNPL companies would depend on various factors including the companies' business models, their ability to adapt to changing market conditions, and the behavior of consumers in response to higher interest rates.
AFRM Tightening Wedge on DailyAFRM is getting tighter and tighter as it retraces back toward the 50 EMA. A red to green entry tomorrow would be perfect, and could see us retest the high of $52.
$AFRM COMPLETE ELLIOT WAVE ANALYSIS Observing the price action of NASDAQ:AFRM , it is evident that it has been navigating through a corrective wave since its inception. Recently, it has culminated the larger corrective Wave B, under which it has also completed the primary Wave C. The completion of Wave C was marked by the termination of Wave 5. This progression implies that NASDAQ:AFRM is now embarking on the larger Wave C, which is anticipated to descend below the trough of Wave A. Based on my analysis, I project the termination of Wave C near the $4 mark. However, it's important to note that the exact timing and price level remain uncertain while the bearish POI stands firm
AFRM cup and handleAFRM has pulled back to support around 41.80, next level possibly retrace back to high of 52.
AFRM - Falling Wedge in an UptrendThere's quite a few of these setups right now. AFRM is in a falling wedge in an uptrend. Looking for a break upwards soon.
AFRM Holy Grail SetupAFRM pulled back below the 20 EMA on the daily. First attempt to break back above. Good risk reward spot to go long in my opinion. Targets $48 and $50
AFRM Week of Jan 8Per request,
Levels for AFRM next week.
Looking at the hourly HA chart, It does look like we can see a bit of upside movement into the next week.
Some other things I am seeing that make me think we could see a slight move but overall the trend is down for AFRM in my opinion.
However, AFRM is at the bottom of its monthly levels:
Overall thought is a slight bounce into the beginning of the week but a resumption of the downtrend. Next daily support is at 40.75.
AFRM: Potential rebound around $35Affirm Holding's stock might rebound if it approaches to $35 per share. If the price stays between $34 and $35, there's a chance for a gain of 20% to 30%. In this scenario, the target range is approximately $42 to $45.5.
EVERYTHING AT THE TOPSI mean is it really that complicated that within the next month we are going too see a bloody XMAS!
Affirm ShortAffirm is looking overbought, double top, volume was decreasing on this last little leg up to form the second top. good risk to reward potential for a short. price targets listed on chart.
Possible trading opportunity A lot of bullish order flow coming in. Entering long on market open on Tuesday.
Please trade at your own risk. This is MY personal trade. I am posting this for educational purposes only.
AFRM showing the first signs of an overbought market and....About a month or so ago I was in a walmart self-checkout line on the west coast of the U.S. and noticed it had Affirm as a payment option. this is the good ol, buy the rumor, sell the news. Whales already were buying the stock lows, knowing an impending credit crisis is looming and the consumer will just find new ways to spend, and AFRM was the first of its kind. it was a covid darling, straight through the ground, now forming its cup and handle, and participating in what will be yet again a major financial/credit crisis, as consumers decide to BNPL on EVERYTHING they can't immediately buy. But it's the holidays man, come on mannnn I'll use it just this once; after all my credit is shot anyways.
credit card payments will cease to be made, as buy now pay later is a debit purchasing program. credit payments will fall to the background of important issues. why? americans going to spend. period. I myself have been victim to this. There is also a multitude of other BNPL Programs, Afterpay, Klarna, Loes, Apple, Nearly every marjor company is begging to implement some form of BNPL. It is the purposeful defualt of the american consumer and economy.
AFRM was the perfect example of buy the rumor sell the news because the news was already there if you simply know what Peter Lynch suggests when picking a stock to invest in. "Look around you." AFRM was already there. (Rumor) and then the press release sent it through the roof, priming it for profit taking and shorts. crazy times we live in.
Affirm long ideaPretty straight forward stoploss and profit target. This might of course not workout at all but to me it seems like institutions have built a position in Affirm during the last couple of weeks. I believe this due to the constant super high volume and it was most buy side. Seen this in swedish stocks like Addlife recently. Constant inflows and it was funds that did some of that. Went from 55-60 to now 110 in a short period. Not because of good earnings imo.
Now you choose your own trades of course. This is just my ideas that I share.
We will see in time how this one play out
Overbought - Pull back for rocket launch to $70 in the LTNASDAQ:AFRM should def be on your watch list going into 2024. To keep my analysis simple, we can see a major inverted head and shoulder forming with an approach to the neckline after completing the head. We can see a high probability of a rejection at this neckline due to the RSI showing overbought on the daily/weekly. I wouldnt short the neckline due to the high momentum the overall markets have experienced, we can still run higher in this overbought scenario.
2 possible scenario ill look at.
Entry long on the bottom of the right shoulder with candlestick confirmation/volume with a target of the neckline.
Second, Entry long break of the neckline with volume (Can wait for retest for entry) and stop loss at the bottom of right shoulder.. target $70 with TP at $50 and $60.
Target could be reached in 1-3 months or sooner.
Not financial advise, pure speculation. Use proper risk management.
Excellent Opportunity in Affirm with 1:2 Risk rewardsAfter a brief period of consolidation, it is currently attempting to break through a recent resistance level. When it crosses $20.05, we can add 50% of the position, and when it is correct, the remaining 50% can be added around $13–14. The chart contains the target and stop loss.
