Continuing the pattern: Intuitive Surgical Inc. (NASDAQ:ISRG)
Intuitive Surgical Inc. ($ISRG) is up 1.74% at $387.61 on a volume of 521,387 shares today just above the average daily volume with one hour left in trading today.Shares opened near the 50 day moving average, traded up and closed near the open yesterday. This created a candlestick pattern known as a [gravestone] doji. As with everything, context is critical, when this pattern forms at the top of a high momentum move it can often be viewed as a bearish development. However, when this pattern forms outside of that context, it’s very often a bullish pattern, signally aggressive buyers are present.
Today’s price action ISRG is continuing the move signaled yesterday, to the upside.
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Intuitive Surgical Inc. Intuitive Surgical, Inc., designs, manufactures and markets da Vinci Surgical Systems, EndoWrist instruments, and surgical accessories.
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It might be tempting to pile into ISRG here, based on the gravestone doji being out of typically bearish context when it’s at the top of an up move, but yesterday’s gravestone doji topped out right at the bottom of a falling window (gap down) after 7/18. On 7/22 price tested the 400 level and failed, on 7/29 it tested 401 and failed, and on 10/8 it tested the same area again and fell back. I might scale in with 25% of a position as price approaches the 400 level, but I wouldn’t want to “pile in” until price broke above 401.50 on significant volume. First target would be the top of the falling window at about 414.50, second target and major resistance in the 432 range. Weekly stochastic shows a bullish cross with a daily stochastic trending up but near previous peaks. Longer term bullish, near term questionable.
Hi Bill. Thanks for the comments.
Yes, candle patterns are weak patterns in and of themselves. (There’s a new one every day). That said, it’s very common to see the buyers ‘showing their hand’ when you have a a long tail like this. It took four days but that’s what happened, ISRG is pulling back today, having completed the run up to, and through, the doji’s tail. And that would conclude the pattern here, traders now will want to focus on longer term patterns and fundamentals for ISRG.