A rectangle pattern has formed in the chart of Axis Capital Holdings Limited (AXS).
AXS is a global property and casualty insurance company that provides clients and distribution partners with a range of products and services. It operates through two segments, Insurance and Reinsurance.
The company has seen an increase in earnings on a consistent basis due to higher net premiums earned, though premiums earnings declined in the first nine months of this year. AXS has undertaken steps to boost growth recently and is also working with its partners in distribution to increase its digital capabilities to create new business in smaller accounts.
AXS had cash and cash equivalents of $1.4 billion as of the end of the last quarter, while long term debt was $1.8 billion. The company has a history of stable revenue growth, with a three-year average of 5%, but sales are down 6.5% for the year. Revenue is expected to grow 6.8% next year.
The stock has a Price to Sales ratio of 0.9, which is lower than the S&P 500, but on par with the industry average. Its Price to Book ratio is 0.9, lower than the industry average. The stock is up for the month, but down year to date, and has shown weak near-term momentum. AXS is rated a “Buy” in our POWR Ratings system.
Take a look at the 1-year chart of AXS below with the added notations:
A rectangle pattern has formed in AXS. The two important price levels to watch are the $50 mark (blue), which has provided support recently, and the $54 resistance level (red). I expect that sometime soon one of those levels will be broken.
A trader could enter a long position on a break above $54, with a protective stop placed under the level of entry. Or a short trade could be made on a break below the $50 mark.
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AXS shares were trading at $51.19 per share on Tuesday morning, down $0.06 (-0.12%). Year-to-date, AXS has declined -11.27%, versus a 15.79% rise in the benchmark S&P 500 index during the same period.
About the Author: christian
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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