CAN SLIM Strategy – DXCM

DXCM daily chart courtesy of MarketSmith

Current Quarterly Earnings – Per share earnings are up to 17 cents in the most recent quarter compared to 1 cent in the same quarter a year ago. Well above the 25% threshold. Of note, DXCM reported a loss the two previous quarters. The latest earnings report is scheduled for later this month around 2/21 (*unconfirmed). 

Annual earnings growth – DXCM is estimated to make a profit of 28 cents this year versus a loss of 11 cents last year. 2019 would mark their first year of profitability.

New product – DXCM is a medical device company focusing on continuous glucose monitoring systems. The company’s system is used by people with diabetes to communicate directly to their mobile device or to a remote monitoring system. DXCM aims to launch disposable sensors that could expand its market opportunity from roughly 3 million people in the United States to over 30 million users. DXCM was founded in 1999 and is headquartered in San Diego, California.

Supply and demand – DXCM has an up/down volume ratio of 1.2 as shares remain just within buying range after breaking out of a stage 1, double bottom base ($138.59 pivot).

Leader or Laggard – DXCM is in the top rated Medical Equipment group which is currently ranked number 14 out of 197 industry groups. With a relative strength rating of 98, DXCM is significantly outperforming the S&P 500 over the last 12 months.

Institutional sponsorship – DXCM has an Accumulation/Distribution rating of B- and mutual fund participation has increased to 852 funds from 627 nearly a year ago. Additionally, fund participation has increased by 10%+ for each of the last 3 quarters.

Market direction – Market is in a confirmed uptrend with 2 distribution days on the S&P and 1 distribution day on the Nasdaq.

Notes: Prior stage 1 base failed without forming a handle. While volume was lower on the most recent 1/9 breakout, volume came in at +53% the following session. Volume has eased over the past 3 weeks as price has drifted lower, perhaps providing a shakeout of the remaining weak hands. Resistance just above $152. See weekly chart below.

DXCM weekly chart courtesy of MarketSmith

Disclaimer: None of the presented content represents individual investment advice to buy or sell securities and the information provided is solely for informational, educational and entertainment purposes. Author has no position in DXCM at the time of this writing.