Affirm Holdings Surges 11.77% on Golden Cross and Bullish Engulfing Pattern as Volume Surges 120%

Affirm Holdings (AFRM) surged 11.77% in the most recent session, closing at $73.39, marking a sharp reversal from prior days of declines. This price action suggests a potential short-term bullish shift, though sustainability will depend on volume and broader trend alignment. Below is a technical analysis of the stock’s dynamics using multiple methodologies.
Candlestick Theory
Recent price action reveals a strong bullish engulfing pattern, with the 12/16 candle forming a large white real body that engulfs the preceding bearish candles. Key support levels are identified at $64.9 (prior low) and $65.306 (December 15 low), while resistance clusters near $68.95 (December 9 high) and $73.98 (December 16 high). The formation of a “piercing line” on December 10 (closing near the midpoint of the prior bearish candle) further reinforces the likelihood of a short-term reversal.
Moving Average Theory
Short-term momentum aligns with the 50-day moving average (approximately $68.50), which has recently crossed above the 200-day MA ($65.50), signaling a potential golden cross. The 100-day MA ($66.80) acts as a dynamic support level. Price remains above all three averages, suggesting an uptrend, though the 200-day MA may act as a psychological floor if the rally consolidates.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the line crossing above the signal line, indicating strengthening bullish momentum. However, the KDJ oscillator (Stochastic RSI) shows overbought conditions (%K at 82, %D at 78), suggesting a potential pullback. Divergence between the MACD and KDJ may indicate a high-probability reversal zone, particularly if the RSI fails to confirm the recent price surge.
Bollinger Bands
Volatility has expanded significantly, with the 20-day Bollinger Bands widening from a narrow contraction in late November. The closing price sits near the upper band ($73.98), signaling overbought conditions. A retest of the lower band ($62.50) could occur if the rally falters, though the current position suggests continued momentum unless a breakdown below the middle band ($68.00) occurs.
Volume-Price Relationship
Trading volume on the recent 11.77% up day ($783 million) surged 120% above the 30-day average, validating the strength of the move. However, volume on subsequent days (e.g., 12/15: $317 million) remains muted, suggesting caution. A continuation of high-volume rallies would confirm sustainability, while a sharp drop in volume could signal distribution.
Relative Strength Index (RSI)
The 14-day RSI has spiked to 72, entering overbought territory. While this does not guarantee a reversal, it highlights a critical inflection point. A close below 60 would suggest weakening momentum, while a sustained move above 70 could indicate a continuation of the rally.
Fibonacci Retracement
Key Fibonacci levels from the 2025-05-09 low ($40.53) to the 2025-09-04 high ($91.34) include 61.8% at $68.00 and 78.6% at $76.30. The recent close at $73.39 is approaching the 78.6% level, which may act as a critical resistance. A breakout above this level would target the psychological $80.00 mark, while a failure to hold it could trigger a retest of the 50% retracement at $65.42.
Confluence and Divergences
The strongest confluence occurs at $68.00, where the 200-day MA, Bollinger middle band, and Fibonacci 61.8% level converge. A break above this level would align bullish signals across all indicators. Divergence exists between the MACD and KDJ, with the former suggesting continuation and the latter indicating overbought conditions, creating a high-probability decision point for near-term positioning.

The analysis underscores a high-probability bullish setup in the short term, supported by multiple indicators, but caution is warranted as overbought conditions and divergences may precede a correction. Traders should monitor volume sustainability and key levels at $68.00 and $73.98 for directional clarity.