We wrote about InMode Ltd. (INMD) on November 13, noting that, " INMD is still in an uptrend with a higher Point and Figure target. If you are long you could take a partial profit and hold the balance with a stop below $37 for now." INMD has soared to around $55+ and an adjustment to the strategy seems in order.
In the daily Japanese candlestick chart of INMD, below, we can see that prices have climbed rapidly in a parabolic manner this month. Tuesday's candle pattern looks like it will be a doji pattern where the open and close are the same or nearly the same. This pattern can mark a reversal if on Wednesday we get confirmation with a lower open and lower close. Prices look extended when compared to the rising 20-day and the rising 50-day moving averages.
Trading volume has increased this month and the On-Balance-Volume (OBV) line has made a new high for the move up. The 12-day price momentum indicator is still rising and does not show a bearish divergence.
In this Point and Figure chart of INMD, below, we can see the big uptrend and a price target of $65. The volume by price bars on the left hand side of the chart shows a lot of volume around $52. A close below $51.50 or so would start to make these longs uncomfortable.
Bottom-line strategy: Our Point and Figure chart still shows a potential price target of $65 but we see a number of clues that indicate we could be an important juncture. Book additional profits and raise stop protection to a close below $50.
