Affirm Stock Drops 7.05% After Failed 100 Test As Technicals Turn Bearish

Affirm Holdings declined by 7.05% in the latest session, closing at $82.22 after trading between $81.60 and $86.22 on moderate volume. This sharp pullback follows a significant 10.59% surge to $88.46 on August 29, which briefly pushed prices near the psychological $100 resistance level amid unusually high volume.
Candlestick Theory
The August 29 bullish engulfing pattern (high: $100, low: $86.76) signaled strong buying momentum, but the subsequent formation of a long red candle on September 2 indicates robust selling pressure. Key support now emerges at $81.60 (September 2 low), with secondary support at $77.75 (August 26 swing low). Resistance solidifies at $86.22–$86.76 (September 2 high/August 29 low), with the $100 psychological level serving as major overhead resistance. The bearish reversal pattern following the $100 test suggests exhaustion of the recent uptrend.
Moving Average Theory
The 50-day moving average (MA) near $77 provides crucial dynamic support, while the 100-day MA at approximately $69 and the rising 200-day MA near $55 reinforce the primary uptrend. Despite the recent pullback, price remains above all key MAs, maintaining the bullish sequence (50 > 100 > 200). However, the current test of the 50-day MA, coupled with slowing momentum, suggests potential consolidation. A decisive close below the 50-day MA would signal trend deterioration.
MACD & KDJ Indicators
The MACD histogram has turned negative after a bearish crossover, signaling fading upward momentum following the August 29 peak. Meanwhile, the KDJ oscillator shows the %K line crossing below %D from overbought territory (>80), confirming near-term bearish momentum. Neither indicator yet reflects oversold conditions, suggesting potential further downside pressure before stabilization. This bearish convergence between MACD and KDJ heightens reversal risk.
Bollinger Bands
The bands expanded dramatically during the August 29 volatility spike (high: $100, low: $86.76) but are now contracting, indicating reduced volatility. Price currently hovers near the lower band ($81.60), which often acts as tactical support. A sustained break below this band would signal accelerating bearish momentum, while a rebound toward the $85 midline would suggest consolidation. The contraction phase increases the probability of a directional breakout in coming sessions.
Volume-Price Relationship
The August 29 rally to $100 occurred on extraordinary volume (43.2M shares vs. 30-day avg ~10M), confirming bullish conviction. However, the subsequent 7.05% decline materialized on moderate volume (13.8M shares), suggesting lack of capitulation. This volume divergence hints the pullback may lack strong bearish conviction, though sustainability remains questionable without accumulation patterns. Volume must increase meaningfully to validate any reversal attempt.
Relative Strength Index (RSI)
The 14-day RSI retreated from near-overbought conditions (68.5) during the August advance to a neutral 47.5 at the latest close, erasing overbought risks but lacking oversold signals. This moderation aligns with normal retracement dynamics. Traders should monitor whether RSI holds above 40 – failure could indicate accelerating bearish momentum. While neutral now, RSI divergence would become significant if price establishes new lows without corresponding momentum confirmation.
Fibonacci Retracement
Applying Fibonacci to the rally from the $77.75 August 26 low to the $100 August 29 high shows critical levels: 61.8% ($86.25) and 78.6% ($82.50). The latest close below the 78.6% retracement level ($82.22 close vs. $82.50 Fib) suggests deep correction momentum. This breaches a key technical threshold, opening the path toward the $77.75 swing low. Notably, this Fibonacci level converges with the 50-day MA ($77), making the $77–$78 zone a critical support cluster. Recovery above $86.25 would shift near-term bias neutral.