Intuitive Surgical, Inc.: This Indicator Suggests BIG Upside for ISRG Stock

Intuitive Surgical, IncISRG stock: Chart Perfection

Inquiring minds have repeatedly asked me what criteria a stock chart should possess to produce an effective long strategy. The question stumped me when I was first asked it, because I didn’t want to overwhelm those who asked with an answer full of technical jargon; I wanted my answer to be informative yet simple. That is when I came across Intuitive Surgical, Inc. (NASDAQ:ISRG) stock and I knew I had the answer I was looking for. Long strategies based on stock charts that are beautiful, healthy, and precise are the easiest to execute. ISRG stock fits that criteria like a glove.

I will begin by focusing on the beauty of ISRG stock using the long-term chart provided below:

Intuitive Surgical, Inc. (NASDAQ

Chart courtesy of

My idea of “beautiful” in investing is a chart that shows a clear, defined trend and there are no question markets popping up on the chart regarding that trend.

From 2007 onward, ISRG stock has been confined to a large but orderly price channel. The beauty here is that a break of the lower trend line would be reason to step aside. It would clearly signal that the current trend has ended.

It also acts as a tool for traders who want to trade the channel. When the share price hits the upper trend, a trader can sell or short ISRG stock as it signals an exhaustion of the current move. When shares hit the lower trend, a trader can buy or cover ISRG stock, as it signals an exhaustion of the current move.

The above chart is the definition of beautiful, as the trend is clearly defined from the lower left to the upper right of the chart—an uptrend by definition and there is little left for argument.

So that brings us to the next criterion: health.

My definition of a healthy stock is when the trend contains impulse waves and consolidation waves. Impulse waves describe a strong move in the stock, coinciding with the main direction of the trend. Consolidation waves describe a pattern of indecision, as traders digest the current move and get ready for the next one.

The following chart illustrates the health of ISRG stock:

Intuitive Surgical, Inc. NASDAQ

Chart courtesy of

The long-term trend has been dominated by impulse waves (highlighted in green in the chart) and consolidation waves (highlighted in pink). Healthy stock charts look like a staircase from the step-up pattern that this creates. ISRG stock is clearly healthy, as it is currently making new all-time highs within an impulse wave.

The final piece of the puzzle is precision.

If we focus on 2009 and 2014, you will notice that each consolidation wave always returns to test a previous area of resistance from which an impulse wave began. The precision of the trend allows us to be completely systematic in our trading rules.

For example, if we combine both charts provided above, we can assume that ISRG stock will eventually revisit the $575.00 price point at some time in the next two years, marking the lower trend line of the channel. This would provide a buying opportunity and is currently the downside target.

The following chart of ISRG stock will be used to formulate an upside target:

Intuitive Surgical, Inc. NASDAQ INDX

Chart courtesy of

The upside price target is determined based on the pattern of the consolidation wave. In the chart above, we have a rare head-and-shoulders continuation pattern. What makes it rare is that this pattern doesn’t often present itself as a continuation, but rather as a reversal. Regardless, the share price target from this pattern is $775.00, based on extrapolating the head above the neckline. This should coincide with the upper trend line of the large channel and provide a selling opportunity.

The Bottom Line on ISRG Stock

ISRG stock is a perfect candidate for a trading strategy because the chart is easy on the eyes, there is no question regarding its trend, and it provides traders with the necessary target prices at which they can act. I am setting alerts for $575.00 and $775.00.

Note: The above analysis is not to be construed as a buy recommendation, as due diligence is key before buying into any investment. Rather, this analysis is meant to serve as an example of the kind of chart to look for when forming a long-term strategy.