2nd Skies Trading

Intuit May Be The Next Intuitive Stock To Buy. Here’s Why

We will always need digital financial solutions as long as there are taxes to file and businesses to run. Intuit Inc, (Nasdaq: INTU) knows it, and it has taken advantage of it with its continual moves into the technology sector (i.e. software).

Intuit May Be The Next Intuitive Stock To Buy 01

(Source: Nataliya Vaitkevich)

Intuit has been a mogul in the tax and accounting software space for a long time, and it has constantly had to fight off competition to keep this position. Despite the fierce competition, at some point, with Microsoft, Intuit currently has the largest market share with two of its main products, QuickBooks (62%) and TurboTax (73%), This alone shows how tough the company is to beat, and companies like this are what we like to see.

The financials of Intuit aren’t flashy, thanks (or no thanks) to the pandemic. But they’re solid. At the end of FY21, INTU recorded a 25% year-on-year increase in total revenue to $9.6 billion. The net income also rose by 13% year-on-year to $2.1 billion. Every company needs sufficient cash flow to run operations and fuel growth. Intuit has more than enough of that, having ended the fiscal year with about $3.9 billion in cash, cash equivalents, and investments.

Intuit May Be The Next Intuitive Stock To Buy 02

(Source: Intuit)

Intuit is working hard to keep existing customers and attract new ones to its two largest products. This is evident in a feature Intuit rolled out which brings professionals onto the platform to help customers make complex accounting and taxing decisions.

The tax and accounting software company bought MailChimp and Credit Karma in the past 12 months in deals summing up to a little over $19 billion. While these acquisitions earned Intuit over 130 million new customers, the real meat of these deals is that they expose Intuit to new markets and new opportunities for growth.

Technical Analysis

The INTU stock is at a very crucial point on the charts now. The bulls are mounting pressure on the $580 – $605 resistance level, and there are two likely scenarios from here.

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The first scenario: The bulls win, break out of the resistance level, continuously create all-time highs until the next pullback.

The second scenario: The bulls falter and the bears force the price back below the resistance level. When this happens, the support trendline is a likely place for the price to fall back to. If this trendline doesn’t hold the price, the $412 – $437 support levels should do the job. But if these two fail to hold the price, the next support level is at $287 – $309.

Irrespective of what happens, we’re bullish on Intuit long term.

Option Positioning

Currently there are about 25K call options and 30K put options out there. We’re seeing short term option support between $565 and $580.

If you’d like to learn how we use options to generate monthly income, then check out our option trading course here.

FULL DISCLOSURE: Chris Capre currently has a long position on $INTU. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Or you can get access to Chris Capre’s entire trading portfolio by becoming a subscriber to Benji Factory.

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