Market Reverses Late in the Day Giving Pause to Euphoria

Intuitive Surgical (ISRG $509.89) plunged 11% in final minutes upon disclosure from Bloomberg of  a safety probe from U.S. regulators. An FDA survey is trying to determine “whether adverse incident reports sent to the agency are ‘a true reflection of problems’.” The trading volume of 783,200 shares is about double the average volume of 429,877 shares most of the increase occurring at the close.As can be seen by the 12 month chart the stocks has been choppy and volatile with three deep plunges to the $480 level with three recoveries to the $550 level but flat over one year. The stock is trading up about 3% after the close to $526. Earlier this month the stock was down on a study questioning the value of robotic surgery for hysterectomies over other minimally invasive surgeries even though it costs one third more. Since 2000 , 1,370 U.S. hospitals have purchased at laest one of the $1.5-$2.2 million robots known as the da Vinci Surgical System made by Intuitive Surgical Inc. of Sunnyvale, CA.

What is unusual about this move is that the Bloomberg report triggered the sell-off only in the last 5 minutes of trading and that the FDA probe was still underway with no conclusions or details of the problems. Look for weakness in other Medtech stocks as well.

The Company is sure to put out a response tomorrow, in the meantime look for other MO stocks that may be overextended and subject to profit taking.

As of 6p ET the S&P Futures were down 5 points with NASDAQ down 3.25.


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