Affirm Holdings (AFRM) has been climbing this year, thanks to a strong daily support trend line. The chart shows that the stock is at a crucial point, where it could either keep growing or pull back, with clear resistance levels above. The main support trend line started from the spring lows and has supported several pivot lows since then, highlighting resistance. Buyers have defended this level, preventing any breakdowns and ensuring higher lows. As long as AFRM stays above this line, it will likely continue to trend upward. However, falling below it could indicate a change in momentum. Above the current price, a resistance level exists in the high-$70s, which is a major obstacle for further growth. Recent attempts to rally have failed here due to an imbalance between demand and supply. Tight candle patterns suggest a struggle between buyers and sellers. Traders see this area as crucial. If the stock resistance holds, we could see a downturn, but breaking through it may attract more buyers. Beyond that, there are further resistance levels in the low-$90s and near $100. The low-$90s might encourage profit-taking, while the ~$100 mark is significant psychologically. This chart offers a clear strategy with points to enter and reassess at each confirmed level. AFRM’s uptrend is encountering resistance, but it is also supported by a historically strong trendline. Keep an eye out for signals that will help define the stock’s future direction. Affirm is steadily moving higher along a key support line but is approaching a major resistance zone in the high-$70s. Recent data indicates that “Buy Now, Pay Later” usage surged over 15% during the 2025 holiday shopping season, helping boost the stock. This situation creates a critical choice for traders as we enter the new year. For those optimistic about the trend, buying call options or bull call spreads with strike prices above $80 could be a way to capitalize on a possible breakout through this resistance. A strong close above the high-$70s, especially on high volume, would signal that sellers in this area have been overcome. This could lead to a quick move toward the next resistance level in the low-$90s. On the other hand, recent government reports indicate a slight rise in 30-day delinquencies on unsecured loans, making us cautious about the high-$70s resistance. A sharp rejection from this level might be an opportunity to buy put options or consider bear put spreads, targeting a move back to the rising support line. The stock’s history of volatility, particularly the major drop in 2022, reminds us that market sentiment can shift quickly. The rising trendline is crucial for managing risk on long positions. If AFRM closes above this line daily, any pullbacks toward it could be seen as buying opportunities. However, a clean break below it would jeopardize the uptrend and could trigger a wave of stop-loss orders. Should a breakout occur, the low-$90s and the psychologically important $100 level are logical points to take profits. Implied volatility is likely to rise as the stock nears these key levels, making options more expensive but also creating opportunities to sell covered calls against a stock position. How the stock performs around the $100 mark will indicate whether this is merely a rally or the start of a new, higher valuation range.

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