Chart of the Day: There's 'Trouble Brewing' With Axon
Ahead of earnings, the chart is again rolling over and does not have the look of a winner. Here's what to watch.
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In typical stair-step fashion, Axon Enterprise (AXON) is turning over, leading to a bearish outcome. The series of lower highs and lower lows tell us the trend remains down, and with earnings out on November 4 there is trouble brewing.
If the line in the sand at just above $600 is not held there is a waterfall decline ahead, way down into the $400's. It is too early to speculate on that outcome, but no question the indicators are bearish.
The moving average convergence divergence (MACD) is starting to roll over, stochastics (momentum) already has and the money flow just went negative. Volume trends are bearish as well — the biggest price days are on down volume. To note, the second big price bar shown in October was some heavy selling, which equates to big institutions dumping the stock.
Still, we like the long-term prospects for Axon and continue to hold the shares in TheStreet Pro Portfolio. Tuesday's earnings after the close may not have a bullish response since the chart looks so poor, but we could see a basing pattern begin over the next couple of months. The candles are pink, which is cautiously bearish on the GoNoGo composite of indicators.
We like AXON in TheStreet Pro Portfolio and rate it a One, or "buy at anytime."
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At the time of publication, TheStreet Pro Portfolio was long AXON.
