Affirm Stock Price fell 10%; Will the AFRM Stock bounce back?

• Affirm Stock Price (NASDAQ: AFRM) fell 10% in a single day and dropped below the crucial support of $14.00.
• AFRM Stock Price faced rejection from the 200 day EMA shows positional trend is down.
• Affirm Holdings Stock Price fell 28% approx from the recent swing high.

Affirm Stock Price (NASDAQ: AFRM) fell 10% in a single day and formed a bearish pattern. It dropped below the crucial support of $14.00 which triggers the fear for the long term investors. 

AFRM Stock Price faced rejection from the 200 day EMA and also dropped below the 50 day EMA shows the trend is reversing down. However, the prices have corrected a lot so a minor bounce is possible. 

In the beginning of May, Affirm Stock Price took support near $8.66 and witnessed buying from the lower levels. It began to rise by forming higher high candles and prices rallied 126% approx in the period of 2 months. 

The momentum in the AFRM Stock halted near to the $19.00 and prices faced rejection. At the same time, the sudden increase in volume is visible indicating short term traders have begun to book profits from the higher levels. 

Later, the prices retraced down and tested the 50 day EMA but the recent sell off shows that sellers are active. Affirm Stock Price closed the previous session at $13.79 with an intraday decline of -10.57%. The market capitalization stands at $4.08 Billion. 

Will Affirm Stock take U-turn or decline further?

Affirm Stock Price formed a double bottom pattern and succeeded to break out of the neckline hurdle. Presently, the price is returning back to the breakout level and buyers are trying their best to rebound. 

Till the AFRM Stock holds the $12.00 support the prices are expected to show the short term bounce. However, the prices will pick up the upside momentum only after breakout of the $16.65 hurdle. 

On the other hand if the situation gets worse and prices continue to decline $12.00 support will be at risk. 

The technical analysis suggests, AFRM Stock Price is near to the crucial support and probability of recovery is high. However, the price might not give a sharp up-move but is likely to consolidate in the range between $12.00 to $16.00. 

AFRM Stock Price eroded 50% of gains

AFRM Stock Price formed a bearish engulfing pattern on the weekly time frame. It erodes the 50% gains generated in the past few months. If the buyers failed to defend the $12.00 support then more downside will open and trap the bullish traders. 

The consolidation is needed to form a base else price is expected to trade with mild bearish bias. The MACD displayed a negative crossover and histogram bar is also declining indicating bearishness. 

The RSI at 40 collapsed down denotes weakness and if prices decline further then it might test the oversold territory. 

Conclusion

Affirm Stock Price (NASDAQ: AFRM) fell 10% in a single day and lost a big chunk of its market capitalization. However, The AFRM Stock Price has corrected a lot and returned back to the breakout level. 

The technical analysis suggests, Till AFRM Stock holds $12.00 the probability of bounce back is high. 

Technical levels

Resistance levels: $16.00 and $20.00

Support levels: $12.00 and $8.66

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.