Affirm Holdings (AFRM) Surges 5.11% on Tax Season Partnership Hype—But Can the Momentum Hold?

Summary
• Affirm’s stock jumps 5.11% to $50.435, driven by a new partnership with H&R Block Canada for tax prep payment plans.
• Intraday range spans $48.26 to $50.84, with turnover at 2.67 million shares.
• Technical indicators signal oversold conditions (RSI: 21.91) and bearish momentum (MACD: -5.64).

Affirm Holdings (AFRM) is riding a wave of optimism after announcing a partnership with H&R Block Canada, allowing clients to split tax preparation costs into installments. The stock’s 5.11% intraday surge reflects renewed investor interest, though technical indicators suggest lingering bearish pressure. With the stock trading below key moving averages and a volatile options chain, traders are weighing the partnership’s long-term impact against near-term technical headwinds.

Tax Season Partnership Fuels Short-Term Optimism
Affirm’s 5.11% intraday rally is directly tied to its partnership with H&R Block Canada, which introduces flexible payment options for tax preparation services. The collaboration, the first of its kind in the Canadian tax sector, positions Affirm to capture a broader consumer base by addressing financial barriers to professional tax services. Positive sentiment from the news—highlighting 37% of Canadians’ lack of tax credit awareness—has driven demand for Affirm’s installment plans. However, the stock remains below critical technical levels, indicating that the move is more sentiment-driven than a fundamental shift in market dynamics.

Consumer Finance Sector Mixed as PayPal Trails
The consumer finance sector shows divergent momentum, with PayPal (PYPL) down 0.17% despite Affirm’s rally. While Affirm’s tax season expansion signals niche growth, PayPal’s slight decline reflects broader sector caution. Affirm’s partnership with H&R Block contrasts with PayPal’s recent struggles to maintain traction in cross-border payments, underscoring the importance of sector-specific catalysts. Investors are parsing whether Affirm’s niche partnerships can outperform broader fintech trends.

Options Playbook: Capitalizing on Volatility Amid Oversold Conditions
• 200-day average: $69.32 (below) • RSI: 21.91 (oversold) • MACD: -5.64 (bearish) • Bollinger Bands: $43.96–$67.40 (wide range)

Affirm’s technical profile suggests a short-term bounce from oversold levels but continued bearish pressure. Key support at $46.00 and resistance at $53.00 define a tight trading range. The options chain reveals high implied volatility (IV) and leverage ratios, but liquidity remains thin. Two contracts stand out:

• AFRM20260306C41: Call option with 156.73% IV, 295.59% leverage, delta 0.8299, theta -0.3141, gamma 0.0205. High leverage and moderate delta suggest potential for rapid gains if the stock breaks above $53.00.
• AFRM20260306P41: Put option with 94.95% IV, 295.59% leverage, delta -0.0741, theta -0.0404, gamma 0.0187. Attractive for downside protection given the stock’s proximity to key support.

Aggressive bulls may consider AFRM20260306C41 into a break above $53.00, while cautious bears might hedge with AFRM20260306P41. A 5% upside scenario (targeting $52.95) would yield a 29.5% return on the call, assuming no gamma decay. However, the stock’s inability to reclaim $60.40 (Ichimoku Kijun) remains a critical bearish signal.

Backtest Affirm Holdings Stock Performance
The backtest of AFRM's performance after a 5% intraday surge from 2022 to the present shows favorable results. The 3-Day win rate is 50.29%, the 10-Day win rate is 47.75%, and the 30-Day win rate is 51.86%, indicating that the stock tends to perform well in the short term following the intraday surge. The maximum return during the backtest period was 9.13% over 30 days, suggesting that there is potential for significant gains if the momentum continues.

Watch for $53.00 Breakout or $46.00 Collapse—Act Now
Affirm’s 5.11% rally is a short-term bounce in a broader bearish trend, with oversold RSI and bearish MACD signaling caution. The partnership with H&R Block Canada offers near-term optimism, but the stock’s inability to reclaim key moving averages (MA-20: $55.68) suggests sideways trading ahead. Investors should monitor the $53.00 resistance and $46.00 support levels, with PayPal’s -0.17% move highlighting sector fragility. Aggressive traders may target AFRM20260306C41 for a breakout play, but prudence is advised until $60.40 is reclaimed. Watch for $53.00 breakout or $46.00 breakdown—act now.