INTUIT INC

200.93 -7.24 (-3.6%) Sell

INTU is a falling knife, continues to bleed every investor trying to catch it

13 min read

INTUIT INC delivered massive losses on Friday. It lost -3.6% to close at 200.93. On a day when the overall market breadth was 35%, it closed higher than 7% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing INTU]

INTU showed a strong down trend over the last 3 months. During this period INTU lost -10.88% and saw a maximum drawdown of -15.62%. There was a short signal during this period which returned +1.72%.

Trend

INTU has been underperforming the SP500 index in recent time, after having outperformed till 3 Oct, 2018. Over the last 2 years 11 months and 10 days, INTU outperformed the SP500 index on 54% days.

During the last three months INTU was mostly loss making and delivered on average -0.15% per day. It's best return during this period (of +5.55%) was on Friday, 12 Oct, 2018. While it's worst loss in the same period (of -7.35%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 25 Sep, 2018 and went on till 1 Oct, 2018. The bullish trend returned +3.99% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 14 Nov, 2018. This bearish trend lost -6.31% of investor capital.

INTU had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of INTU and SP500 index were the same. INTU significantly outperformed SP500 index in May 2018, when it returned +9.1% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. INTU had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.

I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.
-- Warren Buffett

INTU is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in INTU's volatility from 17 Sep, 2018 to 7 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that INTU has significant positive skewness in it's return distribution. This indicates that investors can expect INTU to recover from drawdowns quickly. Which makes INTU a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than INTU. Therefore, SP500 must receive a lower allocation than INTU in your portfolio. INTU usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in INTU), V is a large cap that deserves to be closely tracked for investment opportunities.

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