What INTU’s Consolidation Range Signals

$Intuit(INTU)$ has been trading in a well-defined consolidation range between $599 and $675 for several months, frustrating traders like me looking for a clear breakout or breakdown. Going into its earnings announcement, the stock appeared poised for a bullish move, breaking out of $675 on optimism. However, the mixed earnings report has brought the price back into its familiar range, illustrating the unpredictability of earnings as catalysts and reinforcing the value of patience in trading.

Intuit CEO Sasan Goodarzi

Intuit’s Earnings

Intuit’s fiscal Q1 results were solid, with beats on both top and bottom lines:

• Earnings per Share: Adjusted EPS of $2.50, above the $2.35 expected.

• Revenue: $3.28 billion, exceeding the $3.14 billion consensus estimate, representing 10% year-over-year growth.

However, guidance for Q2 fell short of expectations, triggering a 6% drop in extended trading:

• Q2 Revenue Guidance: $3.81 billion to $3.85 billion, below the $3.87 billion expected.

• Earnings Guidance: $2.55 to $2.61 per share, compared to the $3.20 consensus.

While management maintained its full-year outlook for 12%–13% revenue growth, the near-term challenges tied to TurboTax promotional changes and customer churn in Mailchimp raised concerns about the immediate trajectory of growth.

My Analysis

INTU Daily Chart

From a technical standpoint, the pullback into the $599–$675 range suggests a continuation of the consolidation pattern rather than a decisive directional move. Here’s why I’m adopting a wait-and-see approach:

1. Earnings as a Wild Card: Despite the pre-earnings bullish breakout, the market reaction to Intuit’s Q2 guidance brought the stock right back into its range. This highlights the inherent unpredictability of earnings as catalysts, reinforcing the need to avoid speculative trades before such events.

2. Range-Bound Behavior: The $599–$675 range remains a critical zone for Intuit. The upper limit ($675) has proven to be a strong resistance level, while $599 serves as a reliable support. Until the stock makes a decisive move beyond this range, directional trades carry higher risks of false breakouts or breakdowns.

3. Fundamental Uncertainty: While Intuit’s long-term growth story remains intact, the short-term headwinds, including delayed revenue and customer churn, create an overhang that may limit upward momentum in the near term. Management’s optimism about 2025 and beyond is encouraging, but not actionable for immediate trades.

What I’m Watching

1. Price Action Near $599 and $675: A break below $599 with strong volume would signal bearish momentum and open the door for a short trade targeting lower levels. Conversely, a clean breakout above $675 — ideally with a strong earnings catalyst or improved guidance — would validate a bullish thesis.

2. Implied Volatility and Options Premiums: Consolidation ranges often present opportunities for non-directional strategies like selling iron condors or straddles, as premiums are higher due to earnings volatility. However, I’m cautious about executing these strategies until the stock demonstrates clearer behavior post-earnings.

3. Fundamental Developments: Key updates on TurboTax promotions, Mailchimp’s customer churn resolution, and macroeconomic factors like interest rates and regulatory changes could shift market sentiment.

My Current Stance

Right now, I’m staying on the sidelines with INTU. The stock’s return to the $599–$675 range underscores the need for discipline and patience. I want to see clear confirmation — either a breakout above $675 with strong momentum or a breakdown below $599 — before committing to a directional trade.

The unpredictability of earnings reactions serves as a reminder that not every setup is tradable. Sometimes, the best move is no move at all. In Intuit’s case, I believe the most prudent approach is to wait for the next decisive signal and avoid unnecessary risk in a choppy market environment.

What’s Your Outlook on INTU? Do you see Intuit as a strong long-term buy despite the near-term challenges, or are you waiting for better clarity before making a move?

Share your thoughts, and let’s discuss.

@MillionaireTiger @Tiger_comments @Daily_Discussion @CaptainTiger @TigerSG

Disclaimer: This is a general analysis and not financial advice. Always conduct your own research before making any investment decisions.