On July 15 we reviewed the charts of medical device maker DexCom (DXCM) and wrote that "Aggressive traders could probe the long side of DXCM around current levels. Risk to $72. Maybe we can rally to the $100 area."
Shares of DXCM were strong in early morning trading Friday, up about 7% and have reached our $100 price target.
Let's see what the chart looks like this morning.
In this daily bar chart of DXCM, below, we can see that prices traded sideways since the middle of July in a bullish consolidation pattern. Prices are now trading above the rising 50-day moving average line and above the slower-to-react 200-day moving average line. The On-Balance-Volume (OBV) line has moved sideways the past four months but looks primed to move higher.
The Moving Average Convergence Divergence (MACD) oscillator has been moving around the zero line but it too looks primed to move higher to a clear buy signal.
In this weekly Japanese candlestick chart of DXCM, below, we see a bullish picture. Prices made a bottom reversal pattern the past three weeks. DXCM surged to a new high and is crossing the 40-week moving average line.
The weekly OBV line is still pointed down. The MACD oscillator is improving but still remains below the zero line.
In this daily Point and Figure chart of DXCM, below, we can see an upside breakout and potential price target in the $127 area.
In this weekly Point and Figure chart of DXCM, below, we see the same $127 price target.
Bottom line strategy: Traders who are long DXCM from our July 15 recommendation should take partial profits Friday as prices have reached our original price target of $100. Hold the balance of your shares looking for $127 and raise your sell stops to $85.
