ISRG Loading Up for Push Higher

05/02/2011 11:31 am EST

Focus: STOCKS

After reaching a new high, shares of Intuitive Surgical (ISRG) are now gathering strength at the nearby support level. A new upside move looks imminent, and traders should watch this set-up closely.

We’ve spent a fair amount of time on pullbacks off highs (POH) chart patterns, and one look at the below chart for Intuitive Surgical (ISRG) pretty much tells the story. Keep in mind, however, that this name is prone to three- to five-point mood swings on a daily basis. That can work both for you and against you.

For us, a big part of our success has been due to the pullback off highs long side trade set-ups of leading stocks in clearly defined uptrends. It’s really the only pattern you’ll ever need to know in uptrending markets.

chart

As you can see, this stock is in a clearly defined uptrend pulling back off of its highs. It has also pulled back to a prior support level and above the 50-day average.

Those levels tend to act as supports. For us, we are going to continue to stalk this set-up until it stages an upside crossover of the pink line. At that time, we will step in and buy a call option on this issue.

By the Staff at AllAboutTrends.net

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