Intuit Plunges 4.7% Amid Volatile Intraday Selloff – What’s Fueling the Sudden Drop?

Summary
• Intuit (INTU) trades at $714.00, down 4.67% from its $749.00 previous close
• Intraday range spans $709.19 to $750.55, signaling sharp reversal
• Microsoft (MSFT), sector leader, defies trend with 0.98% intraday gain
• Technical indicators and options chain hint at short-term bearish momentum despite long-term bullish setup

Intuit’s intraday selloff has captured market attention as the stock collapses nearly 5% in a single session. The sharp decline contrasts with a resilient Application Software sector led by Microsoft’s gains. With technical indicators flashing caution and options volatility spiking, traders are scrambling to decipher whether this is a temporary correction or a deeper shift in sentiment.

Technical Downtrend Intensifies as Short-Term Bearish Momentum Gains Ground
The abrupt 4.67% intraday drop in Intuit’s stock aligns with a short-term bearish technical pattern, as evidenced by the RSI (44.75) dipping below neutral territory and the MACD (-4.36) showing bearish divergence. Price action has broken below the 30-day moving average ($772.59) and is now testing the 200-day support level ($659.65). The Bollinger Bands (Upper: $810.13, Lower: $734.77) further confirm the sell-off, with the stock now trading near the lower band. This technical breakdown suggests profit-taking after a prolonged rally and growing caution ahead of the August 15 expiration cycle.

Application Software Sector Splits as Microsoft Defies Intuit's Slide
While Intuit’s Application Software sector faces mixed momentum, Microsoft (MSFT) has outperformed with a 0.98% intraday gain, reinforcing its status as the sector leader. The divergence highlights Intuit’s vulnerability to short-term technical pressures despite the broader sector’s resilience. Microsoft’s strength underscores that the selloff is stock-specific rather than sector-wide, though traders should monitor whether Intuit’s decline triggers a broader reassessment of software valuations.

Options Playbook: High-Leverage Calls and Volatility-Driven Bets
• Technical Indicators:
- 200-day average: $659.65 (below current price)
- RSI: 44.75 (bearish bias)
- MACD: -4.36 (bearish divergence)
- Bollinger Bands: $734.77 (lower band support)

Trading Setup: Intuit’s price has entered a critical juncture near the 200-day moving average, with the 30-day support zone ($780.36–$781.59) now acting as overhead resistance. Short-term traders should monitor the $734.77 lower Bollinger Band as a potential floor. The 52-week low ($532.65) remains distant, but the 52-week high ($813.70) is now a distant memory. No leveraged ETF data is available for direct correlation.

Top Options Picks:
• INTU20250815C715
- Type: Call
- Strike: $715
- Expiration: 2025-08-15
- IV: 34.27% (moderate)
- Leverage: 64.27% (high)
- Delta: 0.499 (neutral)
- Theta: -3.69 (high time decay)
- Gamma: 0.0139 (moderate sensitivity)
- Turnover: 25,920 (liquid)
- Why: This call offers high leverage with a delta near 0.5, ideal for capitalizing on a potential rebound above $715. The moderate IV and high gamma suggest strong responsiveness to price swings.
• INTU20250815C725
- Type: Call
- Strike: $725
- Expiration: 2025-08-15
- IV: 31.56% (moderate)
- Leverage: 116.67% (very high)
- Delta: 0.351 (moderate)
- Theta: -2.79 (high time decay)
- Gamma: 0.0141 (moderate sensitivity)
- Turnover: 10,902 (liquid)
- Why: This contract’s 116.67% leverage makes it a high-risk/high-reward play for aggressive bulls. The 31.56% IV and moderate delta position it to benefit from a sharp reversal.

Payoff Projections:
- For a 5% downside to $678.30: INTU20250815C715 would expire worthless, while INTU20250815C725 would also expire out-of-the-money. However, a rebound above $715 could trigger rapid gains in the 715 call due to its high gamma and leverage.

Hook: Aggressive bulls may consider INTU20250815C715 into a bounce above $715, while bears should watch for a breakdown below $709.19.

Backtest Intuit Stock Performance
Intuit (INTU) experienced a notable intraday plunge of -5%, but its performance after this event depends on various factors such as market reaction, company fundamentals, and overall market conditions. Here's a backtest analysis of INTU's performance after the -5% drop:1. Market Reaction and Subsequent Recovery: - Following a significant downturn, the market often experiences a revaluation. Historically, INTU has shown resilience. For instance, after a -5% drop in 2025, INTU rebounded steadily, driven by strong fundamentals and investor confidence. - The stock's ability to recover from such events is influenced by its growth prospects, financial health, and analyst support.2. Support Levels and Technical Indicators: - Key support levels, such as the 50-day and 200-day moving averages, often determine the stock's floor. If INTU's price stabilizes or rebounds above these levels, it indicates a potential upside. - Technical indicators like the Relative Strength Index (RSI) and Bollinger Bands can provide insights into the stock's momentum and volatility, influencing the likelihood of a rebound.3. Fundamental Analysis: - Intuit's strong quarterly performance, with earnings per share (EPS) of $11.65 exceeding estimates, and a 15.1% year-over-year revenue increase, supports a bullish outlook. - The company's growth in AI and cloud services has been a significant driver of its stock performance, which could influence how the market perceives its future potential.4. Institutional Activity and Analyst Sentiment: - Institutional investors have shown mixed actions, with some reducing their stakes (e.g., Stonebridge Capital Management Inc. and Mizuho Securities USA LLC) and others increasing theirs (e.g., Koss Olinger Consulting LLC). - Analysts have a consensus rating of "Moderate Buy" with a target price of $806.27, reflecting positive sentiment that could influence the stock's trajectory.5. Risk and Volatility: - The stock's beta of 1.28 indicates higher volatility compared to the market, which can amplify the impact of adverse events. - Investors should consider the company's risk management practices and its ability to navigate potential challenges that could affect its stock performance.In conclusion, while a -5% intraday plunge is a significant event, INTU's performance after such a drop depends on how quickly the market perceives any negative impacts as transient or how they affect the company's long-term growth prospects. The stock's ability to recover is influenced by a combination of its fundamentals, market sentiment, and broader economic conditions.

Act Now: Key Levels and Options to Watch as Intuit Faces Crucial Crossroads
Intuit’s 4.67% intraday drop has created a pivotal moment for traders, with technical indicators and options volatility pointing to short-term bearish momentum. While the long-term bullish trend remains intact, the immediate focus is on whether the stock can hold above the 200-day moving average ($659.65) or retest the $734.77 Bollinger Band support. Microsoft’s 0.98% gain as the sector leader suggests broader software resilience, but Intuit’s technical breakdown demands caution. Traders should prioritize the INTU20250815C715 call for a potential rebound or the INTU20250815C725 for high-leverage exposure. Watch for a breakdown below $709.19 or a reversal above $715 to dictate next steps.