Fintech stock Affirm Holdings (AFRM) has fallen sharply since its Feb. 18 three-year high of $82.53, last seen down 3.3% to trade at $47.24 today. The shares are still up 21.8% year-over-year, however, and could soon stage a bounce, considering they’ve pulled back to a historically bullish trendline.
Per Schaeffer’s Senior Quantitative Analyst Rocky White, AFRM is within striking distance of its 200-day moving average. Specifically, the stock is within 0.75 of the trendline’s average true range (ATR), or 20-day ATR, for the first time in at least eight of the past 10 trading days, after spending at least 75% of the last six months above it. Affirm stock has seen two similar signals over the past three years, after which it was higher one month later both of those times, averaging a massive 31.1% gain. From its current perch, a similar move would place AFRM near $62, much closer to its all-time highs.
The equity’s 14-day relative strength index (RSI) of 22 sits firmly in “oversold” territory, indicating the stock is overdue for a short-term bounce. Plus, shorts aren’t building their positions, and short interest represents 5% of the stock’s available float.
In the event of a bounce, any bull notes could provide tailwinds as well. Of the 21 analysts in coverage, 10 carry a “hold” rating, leaving plenty of room for upgrades.
Read the full article here
