In the fast paced "Lightning Round" of Monday night's Mad Money program, Jim Cramer was bullish Axon Enterprise Inc. (AAXN) . Let's take a few minutes to check out the charts and indicators.
In this daily bar chart of AAXN, below, we can see a topping pattern from May through October with a "neckline" across $55. Prices broke down from this top in November by breaking the neckline and the rising 200-day moving average line.
The 50-day moving average line has been bearish since late September and earlier this month crossed below the 200-day line for what is commonly called a bearish death cross.
The daily On-Balance-Volume (OBV) line shows a high in early August and a slow decline. The declining OBV line happens because sellers of AXXN have been more aggressive.
In the lower panel is the 12-day price momentum study which shows a small bullish divergence as momentum has made a higher low from November to December as prices have made lower lows. This divergence is relatively small and with the weak OBV line does not make a good case for a rally.
In this weekly bar chart of AAXN, below, we can see that prices are below the cresting 40-week moving average line. Long-term support lies in the $30-$20 area.
The weekly OBV line has declined for three months and the weekly MACD oscillator crossed the zero line for a sell signal.
In this Point and Figure chart of AXXN, below, we can see an upside price target of near $51 but the bigger picture is down.
Bottom line strategy: In the short run AAXN could rally back to the $51 area but long-term the support in the $30-$20 area is where prices may be headed.
