Back on July 9th in this post we took a look at Intuitive Surgical. From the monthly chart, we gathered that the fascinating medical technology firm, which had once been a momentum leader, could easily now be on the other side of the mountain where the knife cuts both ways. Specifically, bulls looking to rekindle the magic of yesteryear needed a reality check before throwing caution to the wind again.
And with the latest negative earnings reaction by the stock, dip-buyers are now asking: Is it safe?
Updating that monthly chart, below, we can see the major support trendline dating back to the 2009 lows has been breached forcefully. Furthermore, the stock is now closing in on prior resistance from 2007-2010 in the $357-$360 area. To be sure, you can expect prepared daytraders to pounce on that level for a support buy. But keep in mind they will be out of the trade quickly, win or lose.
The real issue I see, beyond a scalp trade, is that the stock is clearly undergoing distribution (heavy institutional selling), which means taking it on the long side largely makes sense of an intraday trade or a one-or-two night hold at best. Apart from that, I would have the stock on my radar as a short setup for swing traders after a likely bear flag now forms.
_______________________________________
Chess, they are also under a litigation, I know cause I got an email 2 months ago from an attorney representing a class action suit of some kind. I used to have a few shares so thats why I got the email.
Thanks, good point.
Is it safe? Hoffman should have bit his damn finger off.
haha yup