Chart of the Day: Axon's 'Day' Has Come
The time has come for the company to 'walk the walk, talk the talk.'
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It has been a difficult path of late for Axon Enterprise (AXON) . We believed the company would boost earnings/revenue from a planned expansion of video and camera equipment along with software buys and initiation by the government and other entities. It turns out maybe some of the spending will be drawn back, and while that is pure speculation at this point, the stock has still taken a massive hit over the past five months.
Axon will report quarterly earnings after the close on Tuesday, February 24.
We see at the left side of the chart the arrow pointing toward a candle in September. That huge bar on moderate volume was post earnings, and while the turnover was not great it definitely signaled institutional selling was getting underway. Remember, the big money takes its time when selling stock, it is not all in one session.
We can see these moves on the chart over weeks where big price bars are witnessed (arrows).
Now, just because the big money is selling does that mean others need to be selling? Not necessarily, in fact, once the big money is out perhaps it may set up a buying opportunity sooner rather than later. As an investor, though, you always want the support of the big money in a name you are in. Unfortunately, that may no longer be the case with Axon, but then again maybe the big money has the story all wrong. We'll find out later this week.
Indicators are oversold; the stock has remained flat around $430-450 over the last couple of weeks. If the company were to surprise to the upside, short sellers could get squeezed. A rather large amount of shorts are in AXON.
We like Axon Enterprise in TheStreet Pro Portfolio and rate it a One, or "buy at anytime."
At the time of publication, TheStreet Pro Portfolio was long AXON.
