Chico’s FAS Inc. (CHS) Stock Moves Down and Here’s Why

Chico’s FAS Inc. (NYSE: CHS) shares rose on Thursday Nov 17 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, stocks opened flat this morning, struggling for direction in early trade ahead of congressional testimony by Federal Reserve Chairwoman Janet Yellen. Ahead of an appearance before the Joint Economic Committee, Yellen said an interest-rate hike could come “relatively soon,”

The S&P 500 SPX, +0.25% fell less than 0.1% to 2,176.85 while Dow Industrials DJIA, -0.05% fell 9 points to 18,858. The Nasdaq Composite COMP, +0.18% declined 0.1% to 5,291.48.

Analysts at Nomura downgraded shares of Chico’s FAS Inc. (NYSE: CHS) from Buy to Neutral in a research note to investors today. The company currently has a rating of Neutral on the stock. A number of other analysts have spoken on the stock recently, and Chico’s FAS Inc. has secured a consensus one-year price target of $13.61, a decrease compared to the opening price of $14.35, a difference of 9.33 percent. Chico’s FAS Inc. stock has a 52-week high of $15.07. Downgrades are more common when analysts believe that the future prospects for the security have diminished from the initial recommendation, often due to a material and major change in the company’s actions, future outlook or industry.

Chico’s FAS Inc. (NYSE: CHS) shares last traded at $14.59, a jump of $0.14 or 0.97% compared to the previous closing price. Opening at $14.35, they ranged from $14.25 and $14.62 throughout the day.

Chico’s FAS Inc. (NYSE: CHS) now has a market cap of 1.89B.

Chico’s FAS Inc. (NYSE: CHS) Average Daily Trading Volume

The stock’s average daily volume is 2,206,790 shares out of a total float 117,126,000 and some 395,220 shares crossed the trading desk yesterday, below the average. Momentum traders often use upticks in trading volume to pinpoint large volume growth or circulation by institutional investors, so look for trading volume to pick up in the coming days.

While an increase in trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a series of days or weeks delivers a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Institutional investors such as these have teams of analysts that research thousands of stocks, so it is good confirmation to see them buying a stock you’re considering.

Chico’s FAS Inc. (NYSE: CHS) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

Traders are able to make make more impactful choices on trades when they track the activity of professional investors.

Trades for Chico’s FAS Inc. (NYSE: CHS) have ranged from $9.61 – 15.07, and the stock now has a 50-day MA of $12.25 and 200-day MA of $11.73. Today’s last price is 3.19%% under the 52 week high of $15.07.

Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors seek companies that have grown their earnings at least 25% or more over a 3 year period.

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