Affirm reports third-quarter earnings on Thursday
Fintech giant Affirm Holdings Inc (NASDAQ:AFRM) is trading a modest 0.6% higher at $72.31 at last check, still stuck beneath familiar pressure at the $80 level. The shares' most recent pullback was captured by the the $70 level, which now happens to be the site of another historically bullish trendline for the shares.
Specifically, AFRM has pulled back to the 126-day trendline. Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock is within 0.75 of the moving average's average true range (ATR) after remaining above it 80% of the time in the past two months. This signal has occurred seven other times in the past 10 years, after which the stock was higher one month later 50% of the time with an average 12.5% gain. A move of similar magnitude would put AFRM above $81 for the first time since September.
Puts have been swarming the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AFRM sports a 50-day put/call volume ratio of 1.38 that ranks in the 99th annual percentile. Plus, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.08 sits in the 96th percentile of annual readings. Should this bearish sentiment begin to unwind, it could add another layer of support for the shares.
Though short interest is down 18.8% in the past two reporting periods, it still accounts for 5% of the stock's total available float. At the stock's average pace of trading, it would take short sellers almost two days to buy back these bearish bets.
Affirm is also one of the next fintech names to announce earnings, with the report due out after the close on Thursday, November, 6. AFRM has a split history of post-earnings performances, with four of the last eight reports producing impressive next-day pops, including a 10.6% lift in August. The stock averaged an earnings swing of 14.8% over the two years, while this quarter, analysts are expecting a larger-than-usual 19% move, regardless of direction.