Affirm Holdings, Inc. operates a platform for digital and mobile-first commerce. Its platform consists of three core elements: a point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app.
Take a look at the 6-month chart of Affirm (NASDAQ: AFRM) below with the added notations:
Chart of AFRM provided by TradingView
AFRM has hit the $31 mark as resistance (yellow) on two separate occasions since May. After pulling lower after the most recent test of $31, the stock appears to be trying to head back up there. A break above $31 would open the door to higher prices for AFRM.
The Tale of the Tape: AFRM has an important level of resistance at $31. A long trade could be entered on a break through that level, with a stop placed below it. However, if you are bearish on the stock, a short trade could be made on any rallies up to the $31 area.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Good luck!
Christian Tharp, CMT
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