Intuit Inc. (INTU) shares rose nearly 7% to an all-time high at $251 on Friday after the financial software company company beat fiscal second quarter profit and revenue estimates. Intuit reaffirmed third quarter and full-year guidance even though the Internal Revenue Service disclosed that e-file returns dropped sharply over 2018 filings through the first week of February, with new tax legislation and a partial government shutdown undermining typical consumer behavior.

Intuit stock has carved an exceptionally bullish long-term price history, rising more than 1,200% since the 2008 market crash. It has just wrapped up the third consolidative period in the past decade, raising the odds that the nascent bull run will carry for months or years and reach well above $300. Along with a modest forward dividend yield, it's hard to find a security offering stronger year-to-year returns.

INTU Long-Term Chart (1993 – 2019)

Long-term technical chart showing the share price performance of Intuit Inc. (INTU)
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The company came public at a split-adjusted $2.58 in March 1993 and entered an immediate uptrend that stalled near $15 in the fourth quarter of 1995. It gave up the majority of rally gains into 1997 and turned sharply higher, completing a round trip into the prior high in 1999. A November breakout caught fire but burned out quickly, stalling at $45 just two months later. That marked the highest high for the next decade, ahead of a 75% decline into April 2001.

The 2001 low at $11.31 marks the lowest low in the past 18 years, giving way to a modest bounce that stalled in 2002 at the 50% sell-off retracement level in the mid-$20s. Four years of narrow sideways action under that level yielded a 2006 breakout, but limited buying power fizzled out in the $30s four months later, ahead of a downturn that held above mid-decade lows during the 2008 economic collapse.

The stock bounced at $20.08 in December 2008, entering a strong uptrend that finally completed a 100% retracement into the 2000 high in 2010. It broke out in 2011, tested new support for two years and took off in a powerful trend advance that posted the most prolific returns so far this century. The rally has tracked a rising channel that was briefly violated during the August 2015 mini flash crash, posting a new high in June 2016 and adding to gains into October 2018.

The monthly stochastics oscillator crossed into a sell cycle in October 2018 and turned higher in the lower half of the indicator panel in January 2018, signaling unusual strength that is typical with this market leader. Note how this technical measurement has failed to reach the oversold level since 2007, a bullish feat rarely seen in the volatile big tech complex. Last week's dramatic breakout continues this positive theme, setting the stage for healthy upside in the coming months.

INTU Short-Term Chart (2017 – 2019)

Short-term technical chart showing the share price performance of Intuit Inc. (INTU)
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The uptrend stalled near $216 in June 2018 and rallied above that level in August, topping out at $231.84 in October. The subsequent decline failed the breakout two weeks later, yielding a series of lower lows into a 20-month trendline in December. The subsequent bounce has unfolded through a series of vertical waves that have exhibited just minor pullbacks. In turn, this predicts that the rally will pause soon, allowing the stock to consolidate gains and shake out weak hands.

The on-balance volume (OBV) accumulation-distribution indicator posted an all-time high with price in 2018 and turned lower in an orderly distribution phase that ended in December. Buying pressure since that time has failed to exceed the prior high, generating a modest bearish divergence that supports the profit-taking theme. That downturn could reach the 50-day exponential moving average (EMA), offering a low-risk buying opportunity for sidelined investors that want to get on board.

The Bottom Line

Intuit stock rallied to an all-time high on Friday after the company reported a strong quarter and full-year outlook. This uptrend has the power to book impressive gains after short-term overbought signals work out of the system.

Disclosure: The author held no positions in the aforementioned securities at the time of publication.