For his first Executive Decision segment of "Mad Money" Wednesday, Jim Cramer welcomed Kevin Sayer, CEO of DexCom Inc. (DXCM) , back to the show. The maker of glucose monitoring equipment posted a monster earnings beat of 65 cents a share that sent Dexcom stock soaring 27% last week and it rang the opening bell Wednesday in honor of the company's 20th anniversary.
Sayer started off by saying that DexCom solves a serious problem for patients with diabetes: monitoring their glucose levels with technology instead of finger pricks. This new technology is making diabetes management more accessible.
Sayer said there's a lot to be learned from the data that DexCom's monitors collect. Patients can see their data to spot pattern and trends and to identify certain foods that cause them problems. But they can also share their data with their doctors and loved ones.
When asked about Dexcom's latest system, Sayer said its G6 monitors are more accurate and now don't even require a finger prick for calibration. The units are easily paired with a patient's phone and their software does the rest.
Turning to the topic of competition, Sayer said there's room for everyone in this growing market, but DexCom has always had the superior technology.
Let's turn to the charts and indicators for some technical guidance.
In this daily bar chart of DXCM, below, we can see that prices were in an uptrend from December before the recent big upside gap. Prices were above the rising 200-day moving average line and also above the rising 50-day line after the gap. The volume pattern shows increased volume when DXCM rallied and a big volume surge with the gap. Chart watchers love heavy volume on breakouts.
The daily On-Balance-Volume shows a long rise the past year, which tells us that buyers of DXCM have been more aggressive for months -- another positive for the chart. The Moving Average Convergence Divergence (MACD) oscillator looks like it turned positive just before the gap.
In this weekly bar chart of DXCM, below, we can see that prices are up four-fold from their 2017 lows -- impressive gains for patient investors. DXCM is above the rising 40-week moving average line. The weekly OBV line has been strong since late 2017 and is close to making a new high for the move up to confirm the price gains. The MACD oscillator on this longer time frame just crossed upward to a fresh outright go long signal.
In this Point and Figure chart of DXCM, below, we only look at price changes of a given percentage movement and ignore smaller jiggles and volume. Here the software is projecting a potential longer-term price target in the $297 area.
Bottom line strategy: Traders looking to go long DXCM should try to buy a dip into the $200-$190 area if possible. Risk a close at $180 for now. The round number of $300 is our price target.