Costco Wholesale Corp. (NASDAQ: COST) shares rose in value Monday Dec 19 with lighter trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.
Meanwhile, the Dow Jones Industrial Average DJIA, +0.22% was trading up 37 points, or 0.2%, at 19,879, inching up to break the psychologically important 20,000 level.
The S&P 500 index SPX, +0.20% was up 6 points, or 0.3% at 2,264, with nine of the 11 main sectors trading higher.
The Nasdaq Composite Index COMP, +0.32% added 18 points, or 0.3% to 5,455.
Analysts at Citigroup Inc. upgraded shares of Costco Wholesale Corp. (NASDAQ: COST) from Neutral to Buy today. Citigroup Inc. currently has a rating of Buy on the shares. A number of other analysts have spoken on the stock in recent days, and the company has earned a consensus one-year price target of $170.50, higher than the opening price of $162.01. Costco Wholesale Corp. stock has a 52-week high of $169.59. Share prices sometimes get a bounce to the upside when analysts upgrade a stock.
Shares of Costco Wholesale Corp. (NASDAQ: COST) opened at $162.01 on Tuesday and has traded in a range between, $161.65 and $162.97, and last traded at $162.68, a jump of $2.27 or 1.42% from the previous closing price.
Costco Wholesale Corp. (NASDAQ: COST) now has a market cap of 71.46B.
Costco Wholesale Corp. (NASDAQ: COST) Average Daily Trading Volume
388,756 shares traded hands yesterday, below normal, out of a total float 431,681,000. Investors often use increases in trading volume to identify heavy volume growth or dissemination by institutional investors, so trading volume is likely to increase in the next few days.
As with all potential breakouts, investors look for volume to be at least 40%-50% higher than normal on the breakout to demonstrate that fund managers and other professional investors are jumping in.
Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Professional investors such as these retain teams of analysts that research thousands of stocks, so it is good confirmation to see them buying a stock you’re considering.
Costco Wholesale Corp. (NASDAQ: COST) 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 spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.
With that in mind, Costco Wholesale Corp. (NASDAQ: COST) now has a 50-day MA of $151.55 and 200-day MA of $156.44. It has traded in a 52-week range between $138.57 – 169.59 and today’s last price is 4.07%% lower than the 52 week high of $169.59.
Earnings growth is a crucial factor to consider when investing in stocks and investors look for companies that have raised their earnings at least 25% or more for a 3 year period.
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