Analyst Note Propels Axon Stock Past 200-Day

Call buying has been popular on AAXN

Axon Enterprise Inc (NASDAQ:AAXN) is trading 4.7% higher at $60.46, after Raymond James upgraded the stock to "strong buy" from "outperform," expecting strong sales growth over the next three years. In fact, the brokerage firm believes AAXN stock could rise to $100 in 2021, and that the company's new line of products could double subscriber growth by 2022. As such, the shares have cleared a notable level on the charts.

More specifically, today's price action has put the equity well above its 200-day moving average, and the $57-$60 range. This latter area not only symbolizes a key round-number level for AAXN, but also is home to a 50% Fibonacci retracement of the shares' 52-week high from July and their 52-week low from December. Now, the $62-$63 level is the next target, which acted as a ceiling back in October and November. Looking farther back, the security hit a record high of $76.45 back on July 24.

The $60 level also has the attention of options traders. For example, the April 60 call is home to heavy open interest, and is again the most popular contract in today's trading. Historically, call buying has been the popular strategy among traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with call buying more than doubling put buying during the past 50 days.

Some call buying could be connected to the high short interest level on Axon Enterprise. Right now, 8.3% of the float is dedicated to short interest, or 5.7 days' worth of buying power, based on average daily volumes. As such, some short sellers may be using long calls to hedge against a sharp rise in the share price.