AXON Head and Shoulders Pattern
Hi all, I came across AXON, and had to show it to you. Anyway, the stock has developed a head and shoulders pattern at its peak. The next coming days are going to be very important because it will show if it will break through support. Now keep in mind, the stock does not always have to follow a pattern and that is why I included more technical information to help me pick a side. Firstly, it broke through the neckline and is now sitting at a second support level. When a stock breaks the neckline it is usually a bad sign, however because this stock had another support level right beneath it, it has a resting place. However, when the stock hit that second support, it tried to retest the neckline by climbing up to it, but was not able to get above it. This is not a good sign because stocks always have a retest after a breakup or breakdown. AXON failed to recover from the brake and therefore is another reason why the stock is going to breakdown. Lastly, I looked at the RSI. The Relative strength index has been gradually decreasing. This shows that buying momentum is decreasing, and also proves how the stock is weak. It could also be considered a RSI bearish divergence because the stock has been flat at a support level, while the RSI is falling. I placed a limit short order of about 20 shares, and put the limit below 138. I also bought some puts that are 'at the money'. I am excited to see how it plays out, and make sure to set a notification for the break below the 138 level. Good luck traders, please like and follow.
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