The last time we had a setup on INTU it was on the Options Profits site and done will Jill Malandrino. We ended up seeing just over an $8.00 rally from that last setup zone. Well it’s setting up again. Recently the higher end of support in this stock was violated, but we are still testing a key zone here at the 63.91-64.72 area. This zone includes quite a few 100% projections (aka measured moves) of prior declines within the larger uptrend. Also not that some of these declines are very similar in TIME of the prior declines. Quite a few of the declines were 7 – 9 trading days as illustrated on the chart. Note that today is 8 days down into this key support decision. Bottom line, I’m interested in taking buy triggers in INTU especially within these next couple of sessions, with the max risk defined below the low end of the cluster. The minimum initial risk should be defined under the low made prior to your buy SIGNAL.
Checking on the options there is a pretty basic idea that jumps out as far as trading a bullish outlook for INTU from here. Looking out to May, the INTU May 60 Call is offered at 6.00. There will be a dividend between now and May expiration and based on history this dividend will be early April and for about 0.17. That’s important to know as the stock price and option premium will adjust down. Despite the dividend and two month to expiration, this 60 strike call has less than 1.00 of time value. Time works against a long option trade, but the farther in the money, the less time value you have to deal with. A move to resistance up at 69.45 would put the INTU May 60 Call at premium of at least 9.45 which is 3.45 higher than the current offer.