DexCom Stock Could Continue to Climb

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DexCom Stock Could Continue to Climb

DexCom, Inc. (DXCM), a medical equipment firm, has had a fantastic year. The stock has risen more than 100% since January 1, but it still has space to rise further. However, many investors will see a high-flying company like DexCom as overbought and doomed to crash from here.

However, the stock has momentum, which can survive any existing overbought indications. The stock is now creating one of my favorite stock patterns: an ascending triangle, which indicates that additional gains are on the way.

As the chart below shows, there is a definite level of resistance for the stock around roughly $149 per share. The level has been tested twice, with each test pushing shares down. The essential feature to note, though, is that the stock’s pullbacks are getting smaller and less extreme. The stock is expected to rise sooner rather than later, indicating a robust uptrend in favor of the stock. The ascending triangle formation is formed by these two trendlines, and it informs us what to anticipate next.

Shares will eventually either break out above the red resistance line and rocket higher, or fall below the green support line and continue to slide. It is only a question of time.

It’s worth noting that rising triangles are often continuation patterns. That is, the breakout usually happens in the same direction as the stock was moving. It was definitely on the rise, with increases of more than 100% this year.

We can acquire a precise price objective to monitor for after the breakout happens by taking the height of the rising triangle formation.

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It is $56 per share in this scenario. That suggests a 50% upside potential from the company’s present price, with the stock poised to touch $205 or higher quickly after breaking out higher.

The simple line is that DexCom is a medical device company with a lot of upside potential. After a 100% surge this year, the stock still has at least 50% more upside potential. Just keep an eye out for the rising triangle pattern to break.

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