DexCom's Quiet Consolidation After Huge Decline

DexCom, Inc. DXCM shares got hammered Sept. 28 when rival Abbott Laboratories ABT received FDA approval for its FreeStyle Libre flash glucose monitoring system. Investors see Abbott’s new system as a lower-priced alternative to DexCom’s continuous glucose monitoring, and shares plummeted 36 percent following the news.

DexCom stock traded as low as $42.62 following the news, its lowest level since 2014.

DexCom delivered an incredible rally for long-term investors that kicked off at under $10 per share at the beginning of 2012 and ended at $103.29 in late 2015. Since that time, the stock has traded mostly sideways in a wide range between $60 and $100. DexCom only once dipped below $50 in the past two years, a brief, intraday drop to $47.92 back in February 2016. That dip was quickly followed by a bounce back up to $68 by month’s end.

This time around, it seems as though DexCom is happy to stay below $50 for the long-haul. The stock initially bounced as high as $50.31 but was hit with selling pressure than sent it back down below $48.

Without a major catalyst ahead, the stock may continue to drift sideways or down for a while. Until the stock can close back above $50, there is potential for further downside if the stock closes below $45 and/or dips below $42.62 on an intraday basis.

The stock was hit by a wave of downgrades following the news, but only Wedbush and Canaccord have stepped up to reiterate bullish ratings.

In terms of support, the $45–$50 level previously served as resistance throughout most of 2014 and could hold for now. Below $45, there doesn’t appear to be any major technical support until the $28.09 level that held in spring 2014.

Joel Elconin contributed to this story.