Financial software company Intuit (INTU) is set to report their latest quarterly earnings figures after the close of trading Tuesday. In our September 22 review of INTU we wrote that "Fundamental analysts are comfortable buying a stock in a downward trend. I prefer to use technical analysis and technicians prefer to follow the trend. The trend in INTU is still down."
Let's check out the charts and indicators.
In this daily bar chart of INTU, below, we can see that prices have been bouncing off the $350 area a number of times. The bigger picture is a decline over the past year. Another downward trend can be seen from the middle of August. Prices are trading below the 50-day moving average line and below the declining 200-day line.
The On-Balance-Volume (OBV) line shows a saw-tooth decline from August but still tells us that sellers of INTU are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is in sell territory below the zero line.
In this weekly Japanese candlestick chart of INTU, below, we can see a battle between the price action and the indicators. Prices have been finding buying interest (support) around the $350 area but the indicators are weak. The slope of the 40-week moving average line is negative.
The weekly OBV line has been weak for a year and a half and the MACD oscillator is bearish.
e In this daily Point and Figure chart of INTU, below, $325 is the potential downside price target.
In this second Point and Figure chart of INTU, below, we used weekly price data. Here the software yields a lower price target in the $273 area.
Bottom line strategy: I have no special knowledge of what the top officers of INTU will tell investors this evening but the chart picture and indicators are not in a bullish alignment. Further weakness is possible in the weeks ahead based on my reading of the charts.
