Commercial Metals Co. (CMC) Stock Moves Down and Here’s Why

Commercial Metals Co. (NYSE: CMC) shares fell on Tuesday Dec 13 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, the Dow DJIA, +0.47% climbed 106 points, or 0.6%, to 19,905. If the Dow finishes higher, it will notch its seventh straight gain.

The S&P 500 index SPX, +0.56% gained 10.45 points, or 0.5%, to 2,267 and the tech-heavy Nasdaq Composite Index COMP, +1.02% added 48 points, or 0.9%, to 5,461.

Both the S&P 500 index SPX, +0.56% and Nasdaq Composite COMP, +1.02% ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting

Analysts at Clarkson Capital downgraded shares of Commercial Metals Co. (NYSE: CMC) from Neutral to Sell in a research note to investors today. Clarkson Capital currently has a rating of Sell on the stock. The one-year price target of $19.30 is a decrease compared to the opening price of $23.27, resulting a fair amount of other analysts to comment on the company in recent days. Looking back over the last year, Commercial Metals Co. stock has a high of $24.64. Important and fundamental changes in the company’s procedures, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have dropped from the original recommendation.

Commercial Metals Co. (NYSE: CMC) shares last traded at $22.95, a drop of $0.56 per share or -2.38% from the previous closing price. Opening at $23.27, they ranged from $22.92 and $23.60 throughout the day.

Commercial Metals Co. (NYSE: CMC) now has a market cap of 2.65B.

Commercial Metals Co. (NYSE: CMC) Average Daily Trading Volume

The stock’s average daily volume is 1,699,420 shares out of a total float 113,874,000 and some 192,133 shares crossed the trading desk yesterday, below the norm. Momentum traders often use swings in trading volume to determine heavy volume aggregation or circulation by institutional investors, so trading volume is likely to increase in the next few days.

While increased trading for one day will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is crucial.

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

Institutional investors such as these retain substantial teams of analysts that investigate thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.

Commercial Metals Co. (NYSE: CMC) 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.

By identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of winning trades.

Trades for Commercial Metals Co. (NYSE: CMC) have ranged from $12.44 – 24.64, and the stock now has a 50-day MA of $20.16 and 200-day MA of $17.33. Today’s last price is 6.86%% lower than the 52 week high of $24.64.

Earnings growth is a critical factor to look at when buying stocks and investors seek companies that have grown their earnings by at least 25% for the past 3 years.

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