Trade of the Day: Intuit Inc. (NASDAQ:INTU)

Advertisement

To receive further updates on this Intuit Inc. (NASDAQ:INTU) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of SlingShot Trader today

There seems to be very little that the right and the left agree on in Washington. However, there is an interesting opportunity for consensus around tax reform. The Trump administration and a Republican Congress want to cut corporate taxes, and the left wants to simplify the individual tax code and increase benefits for middle-class and lower-income taxpayers.

This presents a very interesting opportunity for compromise that would be bad for firms like Intuit Inc. (NASDAQ:INTU) or H & R Block Inc (NYSE:HRB). Besides the Affordable Care Act, tax changes have not been in their favor over the last few years, and we expect investors to start pricing that in as INTU’s big tax quarter approaches.

Speculation about changes in Washington isn’t the only factor here. Intuit has dominated the consumer tax segment but is facing increased competition from H&R Block in the United States and internationally, and online prep companies like TaxAct by Blucora Inc (NASDAQ:BCOR) are more and more formidable. We think the recent earnings report was overblown on subscription numbers. The stock failed at resistance ($115-116 range) and is now likely to drop back to former support.

‘Buy to open’ the INTU January (2017) 110 Puts (INTU170120P00110000)

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.


Article printed from InvestorPlace Media, https://investorplace.com/2016/12/trade-day-intuit-inc-nasdaq-intu/.

©2024 InvestorPlace Media, LLC