Axon Enterprise (AXON)

We got a question on AXON.

AXON continues to display strong absolute and relative price trends, supported by rising 26- and 40-week moving averages, but this stock has struggled of late.

The May breakout and July/September retest has solidified support at 716-695. Rising 26- and 40-week moving averages at 724 and 676, respectively, reinforce this support. As long as these levels hold, preferably on both an absolute basis and relative to the S&P 500, the breakout the December-May basing pattern remains valid with an upside projection to 915.

What's the risk? A potential head-and-shoulders top could be developing if AXON fails to rally beyond 795 and 830, which is the resistance zone for a potential right shoulder. However, absolute and relative uptrends suggest that the burden of proof is on the bears.

Chart 1: Axon Enterprise (AXON): Weekly chart