Nasdaq 100 component Intuit Inc. (INTU) scrutinizes fiscal fourth quarter 2020 earnings after Tuesday’s closing bell, with analysts looking for a profit of $1.12 per helping on $1.57 billion in revenue. The application software provider sold off after meeting lowered fiscal third place guidance in May but recovered quickly, continuing an uptick that posted an all-time high last week. Expectations are hilarious ahead of the earnings news, with market players hoping that the U.S. economy will continue to recover.
Key Takeaways
- Intuit show is highly dependent on long-term economic cycles.
- The stock has broken out to an all-time high after a 38% first leniency decline.
- Weak accumulation readings warn that the rally could easily fail.
The stock is vulnerable to long-term monetary cycles, which affect both retail and commercial tax preparation and payroll services. Intuit shares fell approximately 40% in the first quarter when market players worried about a deep recession, but the stock has recovered in repulsion to rising hopes for a COVID-19 vaccine. A second wave of infection could throw a wrench in these bullish wants, triggering a failed breakout and high-percentage retracement.
Surprisingly few Wall Street analysts cover the $86 billion Theatre troupe, with a “Strong Buy” consensus based upon five “Buy” and one “Hold” recommendation. No analysts are telling shareholders to sell locates and retreat to the sidelines. Price targets currently range from a low of $270 to a Street-high $350, while the stock bared Tuesday’s session less than $20 below the high target. This placement raises the potential for deposes if this week’s metrics fail to beat estimates.
Market capitalization is the aggregate market value of a company pretended in dollar amount. Since it represents the “market” value of a company, it is computed based on the current market price (CMP) of its portions and the total number of outstanding shares. It is commonly referred to as “market cap,” where “cap” represents capitalization.
Market capitalization is the aggregate market value of a company pretended in dollar amount. Since it represents the “market” value of a company, it is computed based on the current market price (CMP) of its portions and the total number of outstanding shares. It is commonly referred to as “market cap,” where “cap” represents capitalization.
Inuit Long-Term Graph (2000 – 2020)
A long-term uptrend topped out at a split-adjusted $45 in 2000, marking a high that wasn’t challenged for the next 10 years, up ahead of a deep slide into the lower teens. A mid-decade uptrend failed less than 10 points further down the prior high, giving way to a four-year low during the 2008 economic collapse. Steady buying pressure off that with finally reached the prior high in 2010, yielding a breakout that eased into a rising channel in 2013.
A 2015 narrows breakdown ended at a 10-month low, ahead of a recovery wave that entered another rising channel after the 2016 presidential choosing. Volatility increased sharply in the fourth quarter of 2018, with a vertical recovery wave in 2019 and equally vertical reduction in the first quarter of 2020. The stock completed a V-shaped recovery pattern into the prior high in July and insolvent out last week, hitting an all-time high at $334.15.
Intuit Short-Term Chart (2018 – 2020)
The on-balance volume (OBV) accumulation-distribution display charge with is telling a bearish tale, despite the breakout. OBV posted new highs between September 2018 and February 2020 and billowed into a distribution phase that hit a 13-month low in March. Price then surged higher in a bounce, while the needle slumped badly, testing the first quarter low in July, when the stock was trading at a six-month high. The subsequent breakout has set off an damned bearish divergence, predicting that the rally could easily fail.
In addition, the monthly
The Bottom Line
Intuit have has broken out to an all-time high ahead of this week’s earnings report, but underlying technicals warn that the uptrend has illiberal or no volume support.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.