Is DexCom Setting Up for a Breakout?

NASDAQ: DXCM | DexCom, Inc. News, Ratings, and Charts

DXCM – A bullish flag pattern has emerged in the chart of Dexcom Inc. (DXCM), where the stock is just under a resistance line. If DXCM breaks through this level, a breakout could occur. Read more if you would like to learn how to profit from this trade.

Dexcom Inc. (DXCM) designs and commercializes continuous glucose monitoring systems for diabetics. CGM systems serve as an alternative to the traditional blood glucose meter process, and the company is evolving its CGM systems to include the disposable sensor and the durable receiver.

The company recently reported a strong third quarter where both earnings and revenues beat expectations. This was driven by solid revenue from the Sensor segment. DXCM also saw revenue growth from both domestic and international sales. In fact, the company’s international foothold bodes well for future growth.

DXCM has a current ratio of 5.0, which indicates it has more than enough liquidity for short-term obligations. This has led to a Quality Grade of B in our POWR Ratings system. The company has also shown strong earnings and revenue growth.

Over the past three years sales have grown an average of 36.3% per year, while earnings jumped an average of 123.5% per year. However, the stock looks overvalued with a forward P/E of 172.41. DXCM has been showing bullish momentum since mid-May as shown in the chart below.

Take a look at the 1-year chart of DXCM with the added notations:

Chart of DXCM provided by TradingView

After rallying for 4 months, DXCM appears to be consolidating in a bullish flag pattern. The pattern gets its name from the appearance of a “flagpole” created during the steep, end of October jump, and then the formation of the current “flag” pennant (blue). This price action implies a break higher but is not a guarantee.

Click Here to Read the Greatest Trading Book Ever Written

A break above the $650 resistance area should lead to higher prices.  Thus a long trade could be made on a break above that level, with a protective stop order placed underneath the entry point.

Want to Discover More Great Trades?

What is better than finding the 1 attractive stock in this article?

Discovering 5 timely trades…like the ones in this new special report. Click below to claim your free copy now!

5 Stocks Ready to BREAKOUT!

DXCM shares rose $5.91 (+0.91%) in premarket trading Monday. Year-to-date, DXCM has gained 74.88%, versus a 26.66% rise in the benchmark S&P 500 index during the same period.

About the Author: Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
DXCMGet RatingGet RatingGet Rating

Most Popular Stories on

:  |  News, Ratings, and Charts

7 Simple Strategies to Beat the Market

Steve Reitmeister has been investing successfully for over 40 years. In his new presentation he shares his top 7 strategies learned over the years to help investors beat the stock market (SPY). Discover these strategies now to improve your investing results in the months and years to come.

:  |  News, Ratings, and Charts

AutoNation: A Great Value Stock

Shortages in parts, especially semiconductors, this year, has been a boon to auto dealerships. Consumers resorted to buying used cars and parts, which benefits a company such as AutoNation, Inc. (AN). The stock has seen strong revenue growth and share gains this year. Since AN is still very much undervalued, there is a lot more upside left for investors.

:  |  News, Ratings, and Charts

Go From Zero to 60 with a Still-Early-Stage Stake in Fisker

Admittedly, it took a long time for Fisker (FSR) to unveil its all-electric SUV. With that event now completed, FSR stock is prepped for a rally.

:  |  News, Ratings, and Charts

Bull Market Update: Year End Targets?

4,700 seems to be a point of serious resistance for the S&P (SPY) leading to an extended consolidation period hand in hand with violent sector rotation. Why is this happening? What happens next? And how to trade this environment? The answer to these questions and more are discussed in this market commentary below...

:  |  News, Ratings, and Charts

Go From Zero to 60 with a Still-Early-Stage Stake in Fisker

Admittedly, it took a long time for Fisker (FSR) to unveil its all-electric SUV. With that event now completed, FSR stock is prepped for a rally.

Read More Stories

More DexCom, Inc. (DXCM) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All DXCM News