Chart of the Week: DexCom
This week we’re going to be focusing on medical device/glucose monitoring machine company, called DexCom; DXCM is the symbol. It’s a San Diego company. Let’s take a look at this chart, it looks pretty strong.
Pretty bold move here, this stock made, from the lows in October, which were about $75, to the end of February, which is about $114. So you can see that move right there was pretty strong.
The stock has a really bullish chart
But what’s more impressive is this pennant pattern – a flag pattern – which is bullish. And it has recently broken out above there on really strong volume. So we have this pennant flag being built right there and then all of a sudden we have this nice breakout on Monday, March 25, on higher volume.
With a follow through day here in the next couple of days, we could certainly see the stock making a much bigger move, probably into the $160 – 165 area.
The stock is reaching overbought ratings right now. But being overbought, staying overbought, is not a problem. As you can see from back in November and December when it got overbought, it stayed overbought for about a month. Being overbought is not a reason for you to sell the stock.
Of course the stock is now – indicators tell us that the MACD is on a buy signal. And Chaikin money flow down here is positive.
We have a good, strong chart. We have indicators showing us that the trend remains bullish, with a series of higher highs and higher lows.
After a bit of a pullback from the early part of January to the late part of February, a good six and a half, seven weeks of a pulback – let’s call it a soft pullback – the stock has roared right back in March and it’s ready to make some higher levels.
So that’s DexCom. Take a look at that and maybe make some call plays or maybe even buying the stock.
Don’t miss a single one of Bob’s charts! Get the Chart of the Week in your inbox every week!
