Intuit Inc.: INTU Stock Is a Trader’s Paradise

INTU StockINTU Stock: Rule Abiding Citizen

I am ecstatic to highlight Intuit Inc. (NASDAQ:INTU) stock because I seldom come across a stock that adheres so closely to technical rules and contains such an exquisite trend. I have looked at INTU stock over numerous time frames and I have yet to come across a signal or pattern on the Intuit stock chart that has failed. I will repeat, this is something I seldom come across.

I use technical analysis as the basis for my investment strategies. This style of investment analysis uses past price data to discern tends and forecast future prices. For investors like myself, INTU stock is a trader’s paradise.

Intuit stock has been on a bullish run that began in 2009 following the financial crisis, and this trend is set to continue. The price action that has supported INTU stock continues to suggest that higher prices are likely.

The following monthly chart of Intuit stock illustrates the trend that has supported price since the financial crisis concluded.

Intu

Chart courtesy of StockCharts.com

The chart above illustrates an uptrend that has supported the price of INTU stock since 2009. This uptrend line is created by connecting the troughs on the price chart. An uptrend is defined by higher highs and higher lows, and this is why this bullish trend and others like it resemble a staircase pattern.

As long as Intuit stock remains above this trend line, shares will continue to trade with a bullish bias. This trend line also defines the risk at any point in time. If Intuit stock ever fell below this trend line, it would be reason to exit any long positions, and it would also suggest that the door for a bearish trend to develop is wide open.

The following weekly chart of Intuit stock illustrates the constructive price action that has advanced the stock price.

Intu1

Chart courtesy of StockCharts.com

The price action above the uptrend line has been healthy and constructive, and continues to support the notion of higher prices.

The price action consists of impulse waves that take Intuit stock to new highs, and consolidation waves that unwind any overbought conditions that have developed in INTU stock and set up the next impulse wave.

The chart above illustrates that after Intuit stock exited the consolidation pattern in an upward direction, the price pulled back to test the pattern from above. This backtest is not uncommon, and it acts to reaffirm that the breakout is legitimate and confirm that a new impulse wave is set to develop.

The following daily chart of Intuit stock illustrates the stock’s adherence to technical levels.

Intu2

Chart courtesy of StockCharts.com

The Intuit stock chart above is an imposed view of the breakout and backtest that occurred in early November.

A golden cross was generated in late March that suggested that a breakout would occur. A golden cross is a bullish signal that is produced when a 50-day moving average, highlighted in blue, crosses above a 200-day moving average, highlighted in red. This signal is used to confirm that a new bullish trend has begun, and it is not uncommon for the trend to accelerate after this signal is generated. The impulse wave that developed supports this notion.

The consolidation wave that followed was orderly, and the price was contained in a descending channel. INTU stock found support at the 200-day moving average, which also coincided with the backtest of the breakout.

The 200-day moving average is an important level that is watched by many. That is because this moving average acts as the dividing line between stocks trading in a bull market versus stocks trading in a bear market. It is not a coincidence that the trend reversed after this moving average was tested from above.

Bottom Line on INTU Stock

I am bullish on Intuit stock because all signs are pointing to further gains. I wish I had come across it earlier. Its adherence to trends and technical indicators truly makes INTU stock a trader’s paradise.