Potential of Upside Today From Gap Down Stocks 21 Sep 2023
As we have seen a broad market trending downwards yesterday (21 Sep 2023), I feel that it is worth paying attention to some of the stocks which are experiencing Gap down.
Below are the 5 stocks which have experiencing more than 2.5% of Gap down change. Will these stocks be experiencing a potential short upside rally tonight?
I think we should be looking at the reason behind this Gap down and determine if this is a short term ot one-off occurrences.
$Affirm Holdings, Inc.(AFRM)$
The reason why Affirm stocks went down on Thursday Afternoon trading could be due to the subscription service that would guarantee a 0% APR on buy now, pay later loans.
This would generate more recurring revenue in addition to the interest it already collects on loans to Affirm.
With the leak of how this would work on its iPhone application, Affirm would be charging a monthly fee of $7.99 and offer upgrades for Affirm's (AFRM) BNPL customers as well as savings account holders. The free upgrade might be a good move, but with the monthly fee, this might have negative impact on their customer retention.
Even though Affirm’s current payment plans have APRs from 0% to 36%, the new plan, called Affirm Plus would guarantee a rate of 0% APR on installment loans of up to $2,500. This might not suit customers who are used to the current 0% to low APRs payment plans.
Why would customer who are buying more than $2,500 being subjected to paying APR? Though Affirm also provide interest rate of 4.75 for their Affirm (AFRM) savings account, which is higher than its current rate of 4.35%.
Based on the 50-day MA period, Affirm is still trading above the 50-day moving averages period, despite suffering a Gap down on 21 Sep 2023.
Would this be able to offset the APR on installment loans? I would see this as a sticky good business model, but it will depend on how Affirm execute it without losing existing customer and keep new potential customer at bay.
Summary
By looking at the Gap down data for 21 Sep 2023, out of the top 5 stocks, I would see potential in Affirm when more details are released on their new APR on installment loans.
I will be watching the price action closely on Affirm in today’s trading.
Appreciate if you could share your thoughts in the comment section whether you think Affirm would have a potential opportunity for an upside?
@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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Just remember Affirm was trading in the $8’s in January and was trading below $14 a few weeks ago. September and August have not been kind to tech stocks because of the Fed and their constant double talk and Affirm still managed to maintain most of its gains.
Which one do you think it’s good to buy at this time?
One thing for certain is Affirm is navigating the FED’s troubled waters quite well. Affirm will be many multiples higher in coming years and patience will be rewarded.
I'm slapping myself for selling the $25 puts yesterday right now.
The 50 day avg at 19 is going to be a battle. Shorts or Put buyers will do or say just about anything to prevent it and longs will rejoice in it. Disclaimer long 1100 shares @ $22.79.
It is rumored that shorts who run out of cash cannot do more here. Big banks don't want to lend more. SQ, Paypal and AFRM will be big winners.
Further proof that Affirm is currently just following the markets until the next news cycle via the earnings report next month.
This stock returning to buying territory, I will buy around 17 dollars a share and will sell when it reaches 30 by the end of the year!
$Affirm Holdings, Inc.(AFRM)$ is my best choice during this period.
Range bound for 12-18 months. Dead $ until maybe 2025.