One final stock that is starting to breakout is DexCom ( DXCM). This company focuses on the design, development and commercialization of continuous glucose monitoring systems for ambulatory use by people with diabetes, and for use by health care providers in the hospital for the treatment of both diabetic and non-diabetic patients.

On Aug. 3, DexCom reported that product revenue grew by around $9 million for the second-quarter of 2010, which was an increase of about 120% from the $4.1 million it reported for the second-quarter of 2009. Total second-quarter revenue for 2010 also grew by 75% from the same quarter in 2009, and an increase of around 23% from the first quarter of 2010.

These strong fundamental results for DexCom helped to push the stock up towards new 52-week highs, which it hit last week when the shares traded at $12.68. This move is coming on above average volume with a number of up days last week trading at well over the 3-month average daily volume of 375,000 shares.

DexCom shares officially broke out in the near term when the stock was able to get above $12.35. The next area of significant resistance sits at around $15, which the stock last traded at back in 2006.

I think there is a strong chance DexCom trades back towards $15 and if it can manage to take out that level, it could quickly move into the low $20s. One of the reasons I think DexCom could trade significant higher is due to the reasonable short interest of 7% and a very low tradable float of 52 million shares.

If the good fundamental news for DexCom continues, then the stock should short squeeze and reach some of my targets mentioned above.

-- Written by Roberto Pedone in Winderemere, Fla.
Stockpickr is a wholly owned subsidiary of TheStreet.com.

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