Why This Sell-Off Means a Reversal Is on the Way

Some of the biggest winners of the past few decades are companies you've never heard of... or at least, companies you don't think about much.

Sure, we all know heavyweights like Microsoft (MSFT) and Apple (AAPL). They're two of the largest companies in the world. And most of us interact with their products daily.

Plenty of companies have achieved similar success... They're just off the radar for most investors.

Today, we're looking at one of those businesses. It's far from a household name... Despite that, the stock has risen about 20% a year since it went public in 1993.

That's similar to what Apple and Microsoft have returned over the same period... and roughly double the market's annual gain.

A stock with that kind of track record rarely gives you a chance to buy at a discount. But you've got that chance right now.

This stock just suffered a major sell-off. It's now hitting record oversold levels. And according to history, that's a setup for big potential profits... with 33% gains possible over the next year.

A Rare Buying Opportunity for This Blue-Chip Stock

The hidden winner we're looking at today is Intuit (INTU). It isn't as well-known as other tech stocks that are leading the market. But it's incredibly successful.

The company's main products are accounting and tax software. Its QuickBooks brand dominates accounting for small businesses, with more than 80% market share. Similarly, its TurboTax product holds a dominant 60% share of the tax-software market.

These wins explain how Intuit has grown so much for so long. But the stock has taken a hit in recent weeks.

Shares soared after their April bottom. But they began moving lower last month. Then, the company announced disappointing earnings on August 21. As a result, the stock has tumbled 18% from its most recent high – a quick and painful decline in about a month.

Importantly, this move has gone too far, too fast. And Intuit recently hit a rare setup based on the relative strength index ("RSI")...

This indicator tells us if a stock has swung too far in either direction. And when the RSI hits an "oversold" extreme reading below 30, a reversal is likely.

In this case, Intuit's RSI recently fell below 24. Take a look...

This is unusual. The stock has only hit two other readings below 25 over the past decade. And we've only seen nine other unique setups like this since Intuit first began trading in 1993.

History tells us this is worth paying attention to... because when Intuit reaches oversold readings like this, big gains tend to follow. Take a look...

Again, Intuit is one of the biggest winners you've probably never thought much about. The stock is up 19.6% per year since 1993.

You can do even better if you buy when the RSI is below 25, though. Similar setups led to 11.9% gains in three months, 22.2% gains in six months, and 33% gains over a year.

Those are healthy returns – and massive outperformance. Plus, the stock was higher a year later 78% of the time.

Of course, this time could be different. It could be the beginning of the end for this dominator... But I wouldn't bet on that.

This is likely just a rare sell-off for an incredible long-term winner. So if you're looking for a blue chip to add to your portfolio, Intuit is worth considering right now.

Good investing,

Brett Eversole