Investors looking for a turnaround story should put MAKO Surgical Corp. (NASDAQ:MAKO) on their watchlist, if not in their portfolio. And just to be clear, I specifically mean long-term investors, as opposed to short-term traders. MAKO has dropped some long-term hints that its long-term slump is about to be reversed and turned into a long-term rally.
Just to be clear, the prompt for this bullish call on MAKO is a technical (chart) based one. While such tactics and clues are generally reserved short-term trading, they can still be useful to long-termers. The key is which clues and signals you choose to examine.
For MAKO Surgical Corp. shares, the big clue today is the 200-day moving average line (green). The stock pushed above this pivotal long-term line in the sand today after failing to cross above it the last two times it was tested. But, given how the 50-day and 100-day moving average lines (purple and gray, respectively) have started to offer support to MAKO shares when they pull back, this cross of the 200-day line has the right foundation behind it.
5 Best Canadian Stocks To Watch For 2014
As compelling as that may be, the weekly chart of MAKO Surgical tells an even more compelling story. As you can see on the weekly chart below, this chart's been working on a slow, U-shaped turnaround from 2012's implosion for a while. It's the shape of that rebound that makes this new cross of the 200-day moving average line such a big deal.
Whereas V-shaped reversals can and often do fail, the slow, arc shape of this budding recovery suggests investors are being methodical and deliberate about it. The slow transition from a net-bearish to a net-bullish environment isn't the kind of effort that's going to up-end the rally the very minute a few people feel the best is behind MAKO and it's time to lock in gains. Rather, it's the kind of move that doesn't attract much attention until the momentum is so strong that nobody would dare sell into the bullish avalanche.
Great, but is MAKO Surgical Corp. even close - at the corporate level - to giving the market the kind of news that will allow the rally to keep rolling (or at least avoid the kind of bad news that can give the market a reason to sell it)? In a word, yes.
MAKO makes surgical robotics and implants. Last year was clearly a tough one for the company. Lawsuits, the possibility that the market for its products would quickly dry up after some serious snafus, and patent fights were just the beginning. As is too often the case though, the market assumed the worst, and priced in problems that it didn't need to. Now that the fog is lifting and we can see the company's not on its death bed, investors are starting to trickle back in. As was described above, though, that trickle is now quickly becoming stampede that few are going to try and fight.
Bottom line? Time to take a shot.... a small one anyway.
If you'd like to get future updates on MAKO Surgical and other medical device stocks, register for the SmallCap Network daily e-newsletter. You'll get stock picks, market calls, analysis, and more. Best of all, it's free. Sign up today.
No comments:
Post a Comment