Here’s how you can trade ISRG now.
Discussed in this article: Intuitive Surgical Inc. ( $ISRG )
Intuitive Surgical ( NASDAQ:ISRG ), let’s just say they’ve got some bad news on the horizon here. The stock was way down after hours and my suggestion was watch how this thing trades in the morning and if it starts trading up then you say, “Okay well that’s the end of that move and now we are going to start factoring in earnings, whatever those are going to be.” In other words the market will effectively get all the bad news out of the way now and then the stock can start running up into earnings. Earnings are due to be announced on the eighteenth, so let’s see if we’ve got this thing set for an earnings run.
What I want to do is first look at the intraday charts; this is what Intuitive Surgical ( NASDAQ:ISRG ) looks like on the daily chart. When a stock like this gaps down I want to know whether this is going to be a gap and crap, or it just gaps down and then keeps going, or if it’s going to be a gap and reverse. I’ll initially be looking at a one-minute chart just to see whether we’re going to get a bounce, we really don’t here, we don’t have a bounce here, so that’s not going to work; I want to stay away from that, so I’ve decided I want to stay away from this.
Now I’m back out on the 15-minute chart and I see this big move down, and by the way, while I’m looking at Intuitive Surgical ( NASDAQ:ISRG ), am I stalking this thing, am I just all over this waiting for this stock to turn? No, there were so many other things moving today, this was the least of my worries. So I see this stock start to trend lower, I don’t want any part of this. At this point you can do couple of things; here’s the 15-minute chart; this is where the stock opened up. If I want to I can set a price alert here and say, “Okay when, or if Intuitive Surgical ( NASDAQ:ISRG ) runs clear up above that, then that’s when I want to buy this stock.”
If you wind up doing that you’re going to miss a heck of a trade, a heck of a reversal, so we don’t want to do that. Instead we look at this line right here, the eight period exponential moving average, I use this a lot, you’re going to look at it on a 15-minute timeframe, it’s going to take awhile for this EMA to move back down to catch up with the price, the only way it’s going to catch up is if the price essentially flat lines, which is kind of been doing. Then your buy signal is when the stock starts trading back above this level and then stays there, it’s got to stay there for at least another bar. If you use this method you can catch bottoms without getting burned, particularly those that keep moving lower, and keep moving lower, but then you just know at some point the buyers are going to come in and start taking the stock up. This is really how you could have caught Intuitive Surgical ( NASDAQ:ISRG ); I think that 8 EMA will work for you.
The next step would be if you really want to hop on board here, I’m not particularly bullish on this, a stock that’s been crushed 15 percent on news that its robotic device kind of hurts people; not really something that I want to be trading. But anyway, you can set a price alert, and when this stock comes up above the open, the opening print, 428.00, I don’t really care so much about the 429.88, which is the intraday high, I don’t really care about that because if this stock gets above the opening print it’s going to go up to a new high here, relative to today. You can a set price alert for that level, and then add to that position that you took, if you took a position on today’s intraday reversal; and by the way if the stock falls below the low of 406.69 you’ve got to sell everything you have because everybody else is.