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Affirm Stock Analysis Should You Buy Affirm ($AFRM) Stock + Is Affirm Stock A Good Buy? - YouTube
Channel: Linus Lim
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should you buy affirm stock now and it's affirm聽
stock a buy hey it's linus here in this video聽聽
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i'll be sharing with you my affirm stock analysis聽
and a recent trade i took on affirm stock and also聽聽
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whether it's now a good time to buy affirm stock聽
if we take a look at affirm stock chart we'll see聽聽
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that affirm stock has been listed relatively聽
recently affirm stock was listed on the 13th聽聽
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of january of this year and on its ipo day affirm聽
stock opened at a price level of $90 and in the聽聽
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next day it went up all the way in then intraday聽
high of around 136 dollars so that's an almost 50%聽聽
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increase in just two trading sessions but i tend聽
to avoid buying stocks that just recently ipo i'll聽聽
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wait at least a few weeks before deciding to聽
invest or trade in a ipo stock because i want聽聽
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to see at least some trading history for that聽
stock so we see that after the second day of the聽聽
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ipo affirm stock managed to trade sideways forward聽
before it made a high of around 146 dollars before聽聽
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it came crashing down to form this long base over聽
here this was the first proper base that affirm聽聽
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stock formed after its ipo and after declining聽
from its previous high over here all the way to聽聽
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the bottom of here affirm stock managed to trade聽
sideways before it gapped up over here this gapped聽聽
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up in price in affirm stock came on the back of聽
news that affirm struck a partnership with amazon聽聽
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this send prices gapping up from around $66聽
all the way to around $99 and this roughly 50%聽聽
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increase in price for affirm stock came on huge聽
volume so at that time over here volume was the聽聽
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highest since its ipo day and after prices gapped聽
up prices managed to hold quite well over here聽聽
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without giving away much of its gains before聽
it gapped up one more time and the gapped up聽聽
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over here also happen on very huge volume in fact聽
this volume on the gapped up is the largest now聽聽
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at this point over here many investors and traders聽
would think that affirm stock is too high already聽聽
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because from here where prices was around $67聽
prices increased all the way to around $130 so聽聽
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affirm stock almost doubled in price from here to聽
here so at this point over here many investors and聽聽
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traders will overlook affirm stock just because聽
they think affirm stock is too high at the price聽聽
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right now but as you can see later on after affirm聽
stock price moves sideways forward to digest the聽聽
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previous move it broke out again over here on聽
this candlestick on above average volume and it聽聽
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has been increasing ever since in fact for me i聽
bought affirm stock on this breakout over here so聽聽
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which means that i missed all on the first gapped聽
up over here and the second gapped up over here聽聽
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but even though i miss out on the two gapped ups聽
i still managed to make some profits from affirm聽聽
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stock so an important lesson over here is that聽
even though a stock move up quite substantially聽聽
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this doesn't mean that the stock cannot rise even聽
further so you shouldn't automatically discount聽聽
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a stock just because it rose up substantially聽
before that in fact because the stock rise up聽聽
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very substantially in the prior move it is all the聽
more why we should pay closer attention to that聽聽
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particular stock because this means that there is聽
likely to be institutional demand for that stock聽聽
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but don't get me wrong over here don't buy a stock聽
just because it went up in price you still want to聽聽
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make sure that the stock meets certain criteria聽
and in this case for affirm stock it did meet my聽聽
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criteria that is why i still traded a firm stock聽
even though it went up in price substantially聽聽
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before that so if we zoom in over here i bought聽
affirm stock on this candlestick over here at the聽聽
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breakout at a price level of around 133 dollars聽
and i saw at this candlestick over here at a price聽聽
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level of around 158 dollars so on this trade聽
i made about 20% while the absolute percentage聽聽
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might not seem a lot there are other factors to聽
consider to determine whether this trade is good聽聽
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or not firstly this trade is a good one because聽
i followed all of my rules and not because i make聽聽
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money on this trade right so that's the first聽
reason why i believe that this trade is a good聽聽
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one for me the second reason is because i make聽
this 20% in a relatively short period of time i聽聽
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entered my position on this candlestick and we聽
calculate the number of candlesticks after that聽聽
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this was the first this was the second third聽
fourth fifth six seven eight nine ten eleven聽聽
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twelve so in short trading sessions i made about聽
twenty percent that's an average of more than one聽聽
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percent on each trading session and if you are聽
able to compound this kind of returns over time聽聽
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say one year you'll be able to do quite well in聽
the stock market so that's the second reason the聽聽
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third reason why i believe that this is a good聽
trade is because of the risk to reward ratio so聽聽
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like i mentioned i enter my buy position in affirm聽
stock at a price level of around 133 dollars聽聽
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that was my entry price and i set my stop loss聽
at this area over here at around $123 so on each聽聽
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stock i'm only risking $10 but if you take a聽
look over here i sold my stock at around $158聽聽
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so you take my exit price minus my entry price so聽
158 dollars minus around $133 that gives you $25聽聽
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so i'm risking $10 per stock to make $25 and that聽
gives me a risk to reward ratio of 1 is to 2.5 and聽聽
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that is a good trade because i can be right just聽
one third of the time or 33% of the time and still聽聽
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be profitable in the stock market and because i聽
built in so much failure in my trading this risk聽聽
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to reward ratio allows me to be profitable in the聽
stock market so those are the three reasons why i聽聽
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believe that this is a good trade for me and聽
that is why you shouldn't just take a look at聽聽
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the absolute percentage returns yeah some people聽
might make hundred percent returns on a single聽聽
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stock but what if they rrisk hundred percent of聽
their money just to make that hundred percent聽聽
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that wouldn't still be a good trade for me because聽
sooner or later that person is going to lose 100%聽聽
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of his or her money so that's a quick breakdown聽
on my trade on affirm stock so should you buy聽聽
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affirm stock now for me personally i took some聽
profits off at this candlestick over here but聽聽
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i still have some positions in a firm stock and聽
because affirm stock has risen quite a bit over聽聽
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here i'm expecting prices to tighten up a bit聽
before it continues to move up if prices do move聽聽
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up the price level that i'm taking a look at is聽
this price level of around 160 dollars if prices聽聽
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of affirm stock break above this price level i聽
might look to continue to add more positions in聽聽
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affirm stock so that's my affirm stock analysis聽
hopefully you have enjoyed and learned something聽聽
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from this video if you did smash the like button聽
because it'll really help the channel grow and聽聽
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allow me to produce more content such as this and聽
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subscribed make sure to subscribe to my channel聽
because each week i release new videos about聽聽
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investing trading in the stock market i'll see you聽
in those other videos to your financial success
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