Signal: Fintech Firm Fit to Resume Run Higher

Popular fintech name Affirm Holdings Inc (NYSE:AFRM) is moving 3.5% lower to trade at $68.96 at last check. Despite its two-day drawdown, the 360-day moving average looks to be continuing its pattern of support, capturing no fewer than two pullbacks already this month. The shares remain more than 20% off their Aug. 28, post-earnings annual peak, but a bull signal is now flashing, meaning the shares could soon resume their run higher.

AFRM sports a 10-day put/call volume ratio of 1.44 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 90% of readings from the past year. There have been five instances in the last three years that the equity's 10-day buy-to-open put/call ratio crossed over 1.0 and moved into the 90th percentile.

Per Schaeffer's Senior Quantitative Analyst Rocky White, the fintech name was higher one month later 60% of the time after these signals, averaging a 24.4% gain. A move of similar magnitude would place the stock back above $85 and within a chip-shot of its August peak. 

Echoing this, AFRM sports a Schaeffer's put/call open interest ratio (SOIR) of 1.10. This ratio ranks higher than 94% of readings from the past year, suggesting short-term bulls have plenty of room to move in. 

Options are looking affordable as well, per the stock's Schaeffer's Volatility Index (SVI) of 51%, which stands higher than just 5% of all other readings from the past year. In other words, near-term option traders are pricing in low volatility expectations at the moment.