Here's Where DexCom Could Rally

Let's look at the charts and indicators.

DexCom (DXCM) is a boon to diabetes management as its system tracks your glucose levels continuously throughout the day and night. A buy side started coverage of the device maker with an "Outperform" rating.

In our last look at DXCM way back on January 19, we wrote that "Fundamental analysts can justify buying a stock in a downtrend, but a technical analyst cannot. I need to see more positive evidence before recommending purchase. Avoid for now."

Let's check out the charts and indicators again. 

In this updated daily bar chart of DXCM, below, we can see that prices made lows in May and June. Prices firmed for a test of the declining 50-day moving average line. Trading volume at the end of May and early June was very heavy and could be a good example of "throw in the towel" action.

The daily On-Balance-Volume (OBV) line shows improvement from late May. The trend-following Moving Average Convergence Divergence (MACD) oscillator is ready to cross the zero line for an outright buy signal.  

 

In this weekly Japanese candlestick chart of DXCM, below, we can see that when prices broke key support around $80 the world did not end. Prices did not start another big move lower. Prices are trying to improve (see the comments above) and we can see a stable OBV line and a MACD oscillator about to give us a cover shorts buy signal. 

 

 

In this daily Point and Figure chart of DXCM, below, we can see a potential upside price target in the $100 area. 

 

 

In this second Point and Figure chart of DXCM, below, we used weekly price data. Here the software projects the $112 area as a target.  

 

Bottom line strategy: Aggressive traders could probe the long side of DXCM around current levels. Risk to $72. Maybe we can rally to the $100 area. 

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