My Trade Plan Recap:
- My Target: I plan to scale out of half of this trade near $130, which is the recent high.
- I want to look to protect the remaining half at breakeven or shoot for $140+ if we see a surge past the all-time highs.
- My stop if we close under $107
My Trade Ideas:
- Higher-risk “spicy” idea: AFRM Oct 22 2021 120 Call near $8
- More conservative idea: AFRM Oct 22 2021 110 Call near $13
AFRM Affirm Holdings Inc. (AFRM) - Bullseye Pick of the Week
AFRM Affirm Holdings Inc. (AFRM)
Original Alert went out on October 08, 2021.
Looking at the chart above, AFRM is trading higher from its lower support level near $108. At the time of writing, this stock is being squeezed between the 13 and 30 hourly moving averages with the 100 hourly above near $115, and the 200 hourly below near $105.
AFRM has been in break mode since announcing their deal with AMZN a few weeks ago. Pouring some fuel on the fire, they announced great earnings after that. I think the recent pullback is a great entry and I am looking to load up soon.
Considering my stop first, I plan to have a stop limit on the trade if AFRM closes under $107, which is below the recent low from 2 weeks ago. The stock did not hit that level last week even though the market was the roughest we have seen in a long time.
That is a very strong sign to me. When a stock doesn’t break lower when the market collapses, that is a great signal that buyers want to step in. We have seen an “inside week” and also 2 “inside days” for AFRM in the market turbulence, which are also very strong signals.
Also consider that we have the Christmas season coming up soon and I expect that many retailers will be adapting AFRM on their checkout pages.
I believe that this should provide a lot of support as we head into December.
On the upside, I plan to scale out of half of this trade near $130, which is the recent high. After that, I would either protect the remaining half at breakeven or shoot for $140+ if we see a surge past the all-time highs.