AAXN breaks below key technical support level
Axon Enterprise Inc. (AAXN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, AAXN ended the month -15.29% lower at 83.13 after losing $1.75 (-2.06%) today, notably underperforming the S&P 500 (0.77%). Today's close at 83.13 marks the lowest recorded closing price since May 29th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 83.48, the share confirmed its breakout through the previous session low after trading up to $1.03 below it intraday.
Daily Candlestick Chart (AAXN as at Jul 31, 2020):
Friday's trading range has been $3.60 (4.2%), that's slightly above the last trading month's daily average range of $3.29. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AAXN.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on July 6th, AAXN lost -3.59% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices broke below the key technical support level at 83.66 (now R1), which is likely to act as resistance going forward. After having been unable to move above 85.71 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 86.05.
Although Axon Enterprise is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Axon Enterprise. Out of 59 times, AAXN closed higher 61.02% 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 62.71% with an average market move of 3.34%.