I hope you own Dexcom, because the stock is behaving like the big event is imminent. As I write today’s BLOG at about 11:30 Pacific Time, DXCM is trying for a new all time high. It’s only traded its average daily volume, so there is clearly little or no stock available on DXCM.
The analyst reports I have read indicate the FDA Approval is expected sometime around the end of March. The stock is trading up in advance of the big event.
Here’s how the current chart looks:
The blue line represents the all time high. $19.43 was the previous high back at the end of January.
Here’s how I’m planning on playing this situation. If the stock trades up into the low to mid 20′s prior to the news of the FDA Approval, I plan to sell half in advance of the event.
It the stock stays around or below $20 in advance, I will simply hold for the big event.
Either way, on the day the FDA Approval is announced, I expect a breakaway gap, followed by a severe and significant pullback. I might even go short a couple of thousand shares. I have learned from experience that every time a stock trades up in advance of a big event, it pulls back after the event is announced. I hope I am quick enough and skilled enough to trade out of it when it happens. If I miss the open that day, I could miss the trade a give back a lot of profits.
If the company is declined by the FDA, I expect to lose a whole bunch of money.
Currently, I am holding 7,000 shares with an average cost of $14.71 in my account.
If you don’t own a little DXCM, you might be missing an outstanding opportunity. Comments and questions are welcome.
I am not in Dexcom – Do you think it wise to try now -it took a 2% hit today?
Editor: Had the stock not pulled back in the last three trading days I would say no. However, since it has pulled back on much lighter volume than took it up, I would say it is worth a punt in here for a short term trade. As I stated, my profit objective is $21.50 on the low side, and $25 on the high side. Assuming the FDA Approval comes sometime in the next week or two, I believe your window in time to sell the stock at a nice profit will be pretty brief. Therefore, you might want to avoid if you cannot watch and trade each morning right around the open. Longer term, I will have another look after the FDA Approval comes and the stock quiets down. If they don’t declined by the FDA, we will all lose a bunch of money.
Another Thank you. Bought at 18,00 and sold at 19.25 in a short time. Bye and .. THANK YOU again for your “ideas”. Carlo.
Editor: I deleted the “other” stocks you mentioned. The purpose of this BLOG is to discuss DXCM, not stocks we don’t cover. Congratulations on the DXCM, but I think you short changed yourself. Look for much higher levels if the FDA Approval comes soon.