AAXN runs into sellers around 77.19 for the third day in a row
Axon Enterprise Inc. (AAXN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AAXN ended the week 0.27% higher at 74.11 after losing $2.45 (-3.2%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AAXN as at May 22, 2020):
Friday's trading range has been $3.56 (4.62%), that's slightly below the last trading month's daily average range of $4.08. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AAXN.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 71.67 (S1). The stock closed back below the 100-day moving average at 74.20 for the first time since May 15th. The share ran into sellers again today around 77.19 for the third trading day in a row after having found sellers at 77.54 in the prior session and at 77.37 two days ago. The last time this happened on March 23rd, AAXN actually gained 10.12% on the following trading day.
Although Axon Enterprise is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 77.54 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 72.88 where further sell stops could get activated.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 100" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Axon Enterprise. Out of 52 times, AAXN closed higher 67.31% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.46% with an average market move of 2.91%.