Chart of the Day: Axon Could Surge Higher
After a sharp pullback, the stock is making a nice run higher during a quieter period.
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If we look back on the chart of Axon Enterprise AXON we notice much of the excitement over price action occurs around earnings. This company often delivers on the promise of strong top- and bottom-line numbers, hence the reason we took a position in the stock just prior to the last release. That move proved to be prescient, but even strong earnings are not good enough when the stock market is getting dismantled.
The best names, however, often rise up when the market fever breaks, as it has recently. Axon is pushing higher on stronger turnover as the most recent pullback seems to have been completed. There is stiff resistance at the $700 level as that would be close to a 20% move upward, which may be asking too much of Axon during this time. The period well before earnings we often see Axon making smaller price moves, that has been the pattern for months.
The Moving Average Convergence Divergence indicator, as seen in second pane, has pulled up nicely and is on a buy signal crossover. The stochastics (momentum), as seen in the second-to-bottom pane, is sharply higher as well, in position for a strong move. Yet, candles are still pink, which reflect a cautiously bearish condition, which could change any day.
We like Axon and rate it a "Two" in TheStreet Pro portfolio, stockpile on pullbacks.
At the time of publication, TheStreet Pro Portfolio was long AXON.
