During the ever popular Mad Money Lightning Round Tuesday evening one caller asked Jim Cramer about DexCom (DXCM) . "There's competition coming from Medtronic (MDT) and people need to get more careful," replied Cramer.
We looked at DXCM last month on Oct. 29 and wrote that, "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."
Let's check out the charts of DXCM again.
In the updated daily bar chart of DXCM, below, we can see that the shares have been in a decline the past four months now. Prices are trading below the declining 50-day moving average line and below the cresting 200-day moving average line.
The On-Balance-Volume (OBV) line shows a weakening trend from August telling us that sellers of DXCM have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been bearish since late August.
In the weekly bar chart of DXCM, below, we see a bearish picture. The shares are trading below the cresting 40-week moving average line.
The weekly OBV line is pointed down and the MACD oscillator is very close to crossing below the zero line for a longer-term sell signal.
In this daily Point and Figure chart of DXCM, below, we can see that the software is projecting the $269 area as a potential downside price target.
Bottom-line strategy: DXCM has fallen and the charts are still bearish. Prices are likely to continue still lower before new buyers might be attracted. Continue to avoid the long side.
