Moving away from the IT sectors we come to Dexcom (DXCM) in Health Care and another stock which is looking increasingly weak and on my watch list for a short and what I am waiting for here is a break below the volatility candle of late October which triggered the reversal inside the spread of this candle. Last week’s down candle threatened to take out this level but closed at $315.87 on the weekly chart and not sufficiently clear of the low to instigate a short, so it is a question of being patient and wait for this to develop. Above we also have the weight of the volume point of control adding its own downwards pressure to the stock following several failed attempts to rally through the $440 price point.

Below the current price, we have potential price-based support coming into play at $290 per share with two levels combining to provide a significant area with the blue dashed line the stronger of the two on the accumulation and distribution indicator. Through here it is the limited volume on the VPOC histogram which then comes into play and falls away to $160 per share where further sustained price-based support awaits.

In the short term, the key will be whether the support at $290 holds or is breached, so a potential short from the current price to this level before congestion is likely to build and thereafter offering a second leg lower long term. Note also the trend monitor has reverted to red confirming the bearish outlook. Finally, note the extremely heavy selling which occurred in mid-May and was the first signal for this longer-term reversal – VPA 101

(Click on image to enlarge)