AFRM calls – Your Bullseye Pick of the Week - Bullseye Pick of the Week
My Trade Plan Details:
- AFRM Dec 8, 2023 $30 calls near $.40
- Stop: Close under $25
- Target 1: $30
- Target 2: $33
My Reasoning:
As you probably know, we had another record-breaking “Black Friday” for overall sales last week…
The market isn’t really cheering this on, but there is one segment that had a big hand in helping get this number to record levels – the “Buy Now, Pay Later” (BNPL) group.
Those are the companies that let you finance your purchases easily over several months, at a high-interest rate, of course! (so don’t do this!)
The leader in this little group of stocks is Affirm (AFRM).
I think the surge in sales could provide a temporary boost for this stock over the next week.
Now, the problem is that the stock is already trading 50% higher than it was a month ago. And don’t forget, I hate this stock. It is junk!
Just because a stock is “junk” doesn’t mean that it can’t make a good move for a short period of time, though. We just saw this stock make a significant move, as I just pointed out.
AFRM also has very high short interest. Something in the neighborhood of 20% of all the shares outstanding are sold short.
This can provide a temporary boost as some of those shorts have to become buyers when they close out their positions.
As much as I don’t like the stock, I think it has a good chance of making another 10%+ move from here.