Buying winners.

It’s a proven concept.

And yet most traders do the opposite. They gravitate toward laggards in hopes of bagging a “catch-up trade.”

But, as regular readers of mine know, winners keep winning. That’s why I buy stocks that have already proven themselves. It makes my job much easier!

That brings me to my newest Trade of the Week: Intuitive Surgical (ISRG).

Intuitive Surgical manufactures robotic surgery machines, including the da Vinci surgical system.

It’s one of the world’s most innovative companies. And it’s one of my favorite healthcare stocks at the moment.

To understand why, let’s pull up its weekly chart.

ISRG broke out to new all-time highs back in January. It’s been consolidating over its prior cycle, or 2021 highs. This is perfectly normal behavior. It allows a stock to “catch its breath” before beginning its next leg up.

In this case, ISRG has traded sideways for several months, forming a base during that time. However, it’s starting to wake up from its long nap.

On Friday, ISRG quietly closed at a new all-time high. That tells me it’s just begun its next major leg higher.

Source: StockCharts (click to enlarge)

I suggest buying a starter position in ISRG today. I believe it could hit $525 within the next 12 months.

Exit your position if ISRG closes below $370. That gives us a risk-reward ratio of more than 3:1 on this trade.

Action to take: Buy ISRG at current market prices.

Risk management: Exit your position if ISRG closes below $370.

Justin Spittler
Chief Trader, RiskHedge