Affirm Stock Extends Slide With 5.6% Drop After Bearish Earnings Reaction

Affirm Holdings (AFRM) concluded the most recent session at $73.86, marking a 5.60% decline and extending its losing streak to two consecutive days with a total drop of 6.17%. This downward pressure reflects near-term bearish sentiment following its quarterly results release on August 8th.
Candlestick Theory
Recent price action features a significant bearish engulfing pattern on August 8th ($79.375 high, $72.33 close, -8.40%), confirming rejection near the psychological $80 resistance. This was followed by lower highs and lower lows, establishing short-term resistance near $77-$78 (August 18th high: $80.158, August 19th high: $77.22). Support is currently being tested around the recent low of $73.35 (August 19th). A break below this level could target the June swing high near $65.70. Long-term support is found near $50-$52, the April-May consolidation zone.
Moving Average Theory
The 50-day MA (approx. $65) has crossed below the 200-day MA (approx. $58) since late July, confirming a long-term bearish "Death Cross." The price remains below both the 50-day and 100-day (approx. $62) MAs, reinforcing the downtrend. The 200-day MA below the current price currently acts as distant potential support. The consistent trading below declining shorter-term MAs underscores a structurally weak trend.
MACD & KDJ Indicators
The MACD line remains below the signal line and has recently crossed below the zero line, indicating strong bearish momentum acceleration following the earnings gap down. This sell signal is firmly intact. The KDJ confirms this bearishness; the %K line is below the %D line, and both are currently descending towards oversold territory (below 30), but have not yet reached extreme levels. While this may suggest a potential oversold bounce eventually, current readings emphasize downside momentum dominance.
Bollinger Bands
Bands contracted significantly leading into the August 8th earnings, signaling a volatility squeeze. The subsequent breakdown occurred with a powerful move below the lower band, expanding volatility and confirming the bearish breakout. Price continues to trade below the 20-period moving average (mid-band) and frequently tests the lower band. The bands are expanding, indicating ongoing bearish momentum is likely to persist.
Volume-Price Relationship
Distribution is evident: the August 8th breakdown occurred on the highest volume seen in months (9.3M shares vs avg ~5-6M). Recent down days (August 19th, August 12th) generally saw higher volume than up days (August 15th, August 11th), indicating conviction behind selling. This increased volume on weakness following the earnings event validates the sustainability of the bearish move. The lack of substantial volume on subsequent minor rallies suggests weak buying interest.
Relative Strength Index (RSI)
The 14-period RSI has plunged dramatically from near overbought levels (above 70) in late July to its current level near 40. This swift decline from overbought confirms the shift in momentum. While not yet oversold (<30), the RSI is trending downward within the neutral zone. Importantly, the price made a lower low (August 19th) relative to early August, but the RSI did not make a significantly lower low – a potential nascent bullish divergence that warrants monitoring, though requires confirmation.
Fibonacci Retracement
Applying Fibonacci retracement to the March 4th peak ($80.72) down to the June 27th trough ($66.06 – significant consolidation low prior to July surge) provides key levels:
50% Retracement: ~$73.39
61.8% Retracement: ~$74.97
The recent price action has consistently rejected near the 50% level ($73.39) since the earnings drop (August 19th low: $73.35, close: $73.86; August 12th close: $76.885). This level now acts as critical overhead resistance. Failure to reclaim it solidifies bearish control, with the next major support at the 38.2% level (~$71.58) and then the 23.6% level (~$69.20). A sustained break above the 50% level would be necessary to challenge the 61.8% resistance near $75.
Confluence Points & Divergences
A strong confluence of bearish signals exists: the Death Cross, MACD below zero, price resistance near the 50% Fibonacci and psychological $73/$75 area, and elevated volume confirming the breakdown. The recent higher RSI low relative to price offers a potential, unconfirmed divergence suggesting selling pressure may be waning near-term. However, the overwhelming confluence of bearish indicators suggests this divergence warrants caution until price convincingly breaks above near-term resistance and volume on upside increases. The path of least resistance remains downward, supported by resistance alignments and negative momentum indicators.