Chart of the Day: A Pullback Appears to Be an Opportunity
Mild selling on this recent trek back to support tells us institutions are still holding on.
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It is getting harder and harder to find good chart setups in this fragile market environment. Yet, some stocks still offer a much better return/risk profile, and one of those we believe is Axon Enterprise AXON.
Axon had a tremendous quarter and reported solid earnings but ran into significant resistance on the upside. The recent base-building period tagged the 200-day moving average where it appears large institutional buyers stepped in around the $460-470 area to snap up shares earlier this month.
Notice the indicators look to be rolling over, but with a higher low in place the stock simply continues building a solid base for the next move, which we believe will be higher. Significant resistance is in view at the $575 area and then slightly higher at the 100-day moving average (call it $585).
We look for that area to be tested soon and likely before Axon reports earnings in May. The old highs around $714 will be a challenge but given the strong beats from this company recently it would not be a surprise to us. This current area seems to be a safe spot to add shares.
We like Axon Enterprise in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long AXON.
