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  1. Home
  2. / Investing

Axon Enterpise Could Bounce Higher Before Heading to Long-Term Support

Let's take a few minutes to check out the charts and indicators.
By BRUCE KAMICH
Dec 11, 2018 | 12:29 PM EST
Stocks quotes in this article: AAXN

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.

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TAGS: Investing | Stocks | Technical Analysis | Defense | Software & Services

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Let's review the charts and indicators.

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