Chart of the Day: Axon Bases in the Right Spot
Building a long base in the higher end of the range is quite bullish.
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Axon AXON has rallied smartly off those reaction lows in early April and is now "taking a rest" and building a base. That process is the foundation for the next move, which we strongly believe is higher than current levels.
Why is that so?
Basically a base-building exercise gives us confidence that the lower level of price won't be penetrated, and that big money buyers are interested in adding shares on the dips.
There have only been few dips since Axon broke out strong in early May, but as the stock bases the volume level has shrunk. That is quite good and normal, as sellers lack the conviction to exit the name.
The indicators have rolled over a bit, but that is not concerning yet. Basically the "heat" from the buyers after earnings has warmed, so we would expect MACD (moving average convergence/divergence), stochastics and money flow to slow down the pace.
We like Axon in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long AXON.
