Chart of the Day: Is Axon's Slump a Sign of Risk to the Stock or the Market?
The stock has fallen by the wayside, but does that mean it's really time to get out?
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Chart of the Day: Axon Shows Some Spark
Sometimes the good stocks with solid fundamentals get ignored for a time, and the suddenly the crowd rushes in to buy, making it nearly impossible to maintain a decent entry point. This brings us to Axon Enterprise (AXON) . We have written extensively about the company before and after that strong report the came out end of February. At the time, the stock appeared ready to break a formidable downtrend line on heavy volume, but the stock market had other ideas for Axon and other strong growth names.
Do we think something has changed in the fundamentals after an 8% pullback? Absolutely not, but when the market tells you there is danger in the water, you get out until things settle down. That is the message of the market, no matter how good a company is performing it is time to sell for many investors/traders when the signs are there.
Yet, we are long-term investors and as such will look at this move down as a blip on the screen as there is real value when the stock comes down. The indicators are not flashing bullish here, but the fact volume levels have been low since the breakout move in February tells us the conviction to sell is just not present. Money flow at the bottom of the chart also remains bullish through the last few down sessions. A move down to the 20 day moving average, you might consider this an opportunity (down move) that is too good to pass up.
Related: Charting the S&P 500: Bears Make Their Biggest Move Yet
We like Axon in TheStreet Pro portfolio and rate it a one, buy at anytime.
