Dexcom Drops 3.30% After Bullish Rally as Technicals Signal Exhaustion Near Resistance

Dexcom (DXCM) declined 3.30% in the latest session, closing at $84.68 after a significant prior-day rally. This analysis employs multiple technical frameworks to assess the stock's trajectory.
Candlestick Theory
Recent candlestick patterns reveal notable dynamics. The June 24 session formed a robust bullish marubozu, surging 9.68% on high volume, indicating strong buying pressure. However, June 25 printed a bearish engulfing pattern, closing near its low at $84.68 after testing $87.75 resistance. This reversal signal suggests exhaustion near the $88.32–$89.00 resistance zone, which aligns with June peaks. Immediate support resides at $84.40 (June 25 low), with major support at $79.40 (June 24 low). A breakdown below $84.40 may trigger further declines toward $80.00 psychological support.
Moving Average Theory
The 50-day moving average (approximately $81.50) maintains an upward slope above the ascending 100-day MA (~$77.00), confirming the intermediate-term bullish trend. The current price holding above both averages reinforces this bias. The 50/100-day golden cross formed in May 2025 remains intact, suggesting underlying strength. However, the price pulling back from the 200-day MA (est. $76.00) warrants monitoring for potential mean-reversion pressure.
MACD & KDJ Indicators
MACD shows a tentative bearish crossover signal following the June 25 decline, as the histogram contracts toward the zero line. Momentum divergence appears possible if weakness persists. KDJ readings hover near neutral (June 25 %K ~65), retreating from overbought territory (>80) after the June 24 surge. While no decisive bearish cross is evident, the loss of momentum oscillator upside suggests near-term consolidation. Both indicators align in signaling fading bullish momentum.
Bollinger Bands
Volatility expanded dramatically on June 24 as price pierced the upper Bollinger Band, reflecting explosive movement. The subsequent contraction on June 25 indicates normalization, with price settling near the 20-day moving average (mid-Band). This reversion signals reduced directional conviction. Bandwidth remains elevated compared to early June levels, suggesting persistent instability. A close below $83.00 (mid-Band support) may foreshadow further downside.
Volume-Price Relationship
Volume analysis validates key price movements. The June 24 rally occurred on 10.2M shares – the highest volume since May’s earnings surge – confirming bullish conviction. June 25’s decline transpired on 4.2M shares (22% below 30-day average), suggesting limited capitulation. This divergence implies the retreat lacks strong seller conviction, potentially positioning the pullback as profit-taking rather than structural weakness.
Relative Strength Index (RSI)
The 14-day RSI reads approximately 48 after the June 25 close, retreating from near-overbought conditions (70 on June 24). This neutral positioning reflects balanced momentum. While the oscillator exited overbought territory rapidly, it avoided oversold extremes (<30), maintaining flexibility for directional recovery. The RSI’s failure to confirm the June 24 high creates a bearish divergence, warranting caution.
Fibonacci Retracement
Applying Fibonacci levels to the swing from $77.81 (June 23 low) to $88.32 (June 24 high) reveals critical thresholds. The 38.2% retracement ($84.31) provided initial support during June 25’s low of $84.40. A sustained break below this level exposes the 50% retracement at $83.07, aligned with the June 17 close. The 61.8% level ($81.82) converges with key moving averages, offering major support. Resistance remains firm at $88.32, with bulls needing to surpass the 23.6% retracement ($85.84) to regain momentum.
Confluence & Divergence Observations
Confluence emerges at $83.00–$83.50, where the 50-day MA, Bollinger mid-band, and Fibonacci 50% level converge to create robust support. The $88.00–$88.50 resistance zone aligns with the double-top formation and upper Bollinger Band. Notable divergences include RSI non-confirmation of the June 24 high and MACD’s loss of positive momentum – both warning signs. Volume divergence during the pullback suggests the uptrend isn’t conclusively broken, but bears control the immediate tape below $85.84.