Dow Chemical Co. (NYSE: DOW) shares rose in value yesterday on heavier trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.
Analysts at Zacks Investment Research upgraded shares of Dow Chemical Co. (NYSE: DOW) from Hold to Buy today. With a rating of Buy on the stock, the company has a 52-week high of $57.10. A number of other analysts have commented on the company in recent days, and Dow Chemical Co. has earned a consensus one-year price target of $60.50, higher than the opening price of $52.03. Stock prices often trend to the upside on recommendations and new price targets of professional analysts.
Meanwhile, the Dow Jones Industrial Average DJIA, +0.62% finished up 112.58 points, or 0.6%, at 18,281.03 yesterday.
The Nasdaq Composite Index COMP, +0.50% rose 26.36 points, or 0.5%, to end at 5,316.02, and is up 0.1% for the week to date.
The S&P 500 index SPX, +0.43% added 9.24 points, or 0.4%, to close at 2,159.73.
Dow Chemical Co. (NYSE: DOW) shares last traded at $52.70, which represents an increase of $0.84 or 0.02 over the previous closing price. Opening at $52.03, they varied from $51.97 and $52.99 throughout the day.
Dow Chemical Co. (NYSE: DOW) now has a market cap of 59.38B.
Dow Chemical Co.Trading Volume
The stock’s average daily volume is 5,610,350 shares out of a total float 1,051,163,000 and some 6,365,723 shares crossed the trading desk yesterday, above normal. Large increases in trading volume and price appreciation together could signal excessive volume accumulation by institutional investors.
As with all potential breakouts, investors watch for volume to be at least 40%-50% above normal on the breakout to demonstrate that fund managers and other professional investors are jumping in.
Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These instituitional investors retain teams of analysts that investigate thousands of stocks. Thus, watching their interests is a good way to ensure you are buying the right stocks.
Dow Chemical Co. 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 following the activity of these professional investors—and the moving averages they affect— traders are able to make make well planned trades.
Trades for Dow Chemical Co. (NYSE: DOW) have ranged from $40.26 – 57.10, and the stock now has a 50-day MA of $53.05 and 200-day MA of $52.24. Today’s last price is 0.08% lower than the 52 week high of $57.10.
Earnings growth is a critical factor to look at when buying stocks and investors identify companies that have grown their earnings at least 25% or more for a 3 year period.
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