During the popular "Lightning Round" segment of Mad Money Wednesday night, one caller asked Jim Cramer his opinion of the diabetes monitor maker DexCom (DXCM) : "Let's start a position in DexCom if you don't already have one," was Cramer's advice.
(For more on DXCM, see Jim Cramer: Health Care Stocks, the Election and the Perfect Setup)
We last reviewed DXCM on July 30 and wrote that, "With a flat and diverging OBV line and weakening price momentum traders and investors who are long DXCM should consider booking some profits and/or tightening sell stops as another correction/pullback could unfold in the weeks ahead."
In this daily bar chart of DXCM, below, we can see that prices have declined enough to test the rising 200-day moving average line. DXCM last tested the 200-day line back in March but that is no guarantee that this time will produce the same result. The slope of the 50-day moving average line is negative.
Bottom line strategy: DXCM has been "rolling over" since May so the risk is that there has been a fair amount of liquidation (selling) and a bigger decline is possible. I would put DXCM on the shopping list and wait and see how things develop.