ISRG Stock Is Advancing on the Next Leg of Its Bull Market

ISRG StockISRG Stock: The Future Is Now

There is a general theme is today’s business world that companies that are deemed “disruptors” are the ones that are going to succeed. A disruptor is a company that creates a new segment of the economy that encroaches on—and disrupts—an existing segment. These companies have a tendency to grow at an exponential rate, at the expense of the archaic technology that preceded it.

Intuitive Surgical, Inc. (NASDAQ:ISRG) stock falls within this disruptor theme, and ISRG stock investors stand to benefit as a result.

Intuitive Surgical is a company that has redefined the way surgeries are performed, and they have done this by producing robot-assisted surgical systems. These systems allow a doctor to perform a surgery from a remote terminal. This opens up the possibility that a specialist can perform surgeries across continents using one remote terminal. The potential that this type of technology offers is completely mind-blowing, and it will redefine the way surgeries are performed for many years to come.

If the sheer scope of this technology was not enough of a compelling reason to support the notion that this company will reap many benefits, my favorite tool, the price chart, supports the view that higher Intuitive Surgical stock prices are on the horizon.

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This view is predicated on technical analysis, a style of investment analysis that is based on the view that historical price and volume data can be used to discern trends and forecast future prices. This method has served me well in my career, and it is my preferred method of investment analysis.

The following ISRG stock chart illustrates a long-term bullish trend that continues to support the view that higher prices are likely.

isrg chart

Chart courtesy of StockCharts.com

The long-term bullish trend on the Intuitive Surgical price chart above is best defined using an ascending channel. This pattern contains two parallel upward-sloping trend lines that serves to define lower support and upper resistance. For nearly a decade, ISRG has been oscillating between these two levels as the trend toward higher prices continues to develop.

In 2014, Intuitive Surgical bottomed after a support level outlined by the ascending channel was tested. This test was accompanied by a bullish signal generated by the moving average convergence/divergence (MACD) indicator. This indicator is a simple, yet effective, trend-following momentum indicator that uses signal-line crosses to distinguish between bullish and bearish momentum.

A bullish MACD cross serves to suggest that higher prices are likely because bullish momentum supports an advance. This indicator was instrumental in confirming that a new bullish advance began in 2014. In the years that followed, there were two attempts at a bearish cross, and both of these attempts were thwarted.

The inability to create a bearish cross indicates that bullish momentum remains especially strong. It takes a lot of buying pressure to thwart a bearish signal, and to do it on two consecutive occasions is an indication that this investment is inherently strong, and higher prices are likely.

If this alone was not enough of an indication that higher prices are likely, the price action contained within this entire bull market run has been extremely constructive.

The constructive price action is illustrated on the chart below.

isrg stock chart

Chart courtesy of StockCharts.com

The price chart above is an example of a long-term trend that has stained itself using constructive price action.

Constructive price action consists of impulse waves and consolidation waves. Impulse waves serve to advance the price while consolidation waves serve to unwind overbought conditions and set up the next impulse wave.

On the price chart above, the impulse waves are highlighted in green, and the consolidation waves are highlighted in purple. The alternation between these two waves creates the building blocks for a sustainable long-term trend.

The following ISRG stock chart illustrates the recent development on the price chart that suggests that a test of resistance outlined by the ascending channel is the next logical price objective.

ISRG Stock chart

Chart courtesy of StockCharts.com

The price chart illustrates that Intuitive Surgical stock has recently broken above a minor resistance level, and is currently creating new all-time highs. The break above resistance is being reinforced with a bullish MACD cross that was generated using a weekly scale. This confluence of indicators strongly suggests that higher prices are likely. From a trader’s prescriptive, a constructive strategy can be generated to take advantage of these signals that were just generated.

Bottom Line on Intuitive Surgical Stock

Equity markets continue to make headlines as each passing day creates new all-time highs. This creates a backdrop where the path of least resistance for equity prices is toward higher prices. This bullish backdrop coincides with the indicators on the Intuitive Surgical stock chart that support an advance.

It is my belief that the resistance outlined by the ascending channel will be tested in the not-too-distant future and, as long as the indicators on the ISRG stock chart support this view, I will remain bullish on the prospects of higher prices.