Encana Corp. (ECA) Shares Slip, Investors Watching Closely, Here is Why

Encana Corp. (NYSE: ECA) shares rose on Monday Nov 21 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 were set to open up this morning. The Dow Jones Industrial Average futures YMZ6, +0.20% was 10 points, or less than 0.1%, higher at 18,863, while S&P 500 index futures ESZ6, +0.44% rose 3.95 points, or 0.2%, at 2,184.75. Nasdaq-100 NQZ6, +0.74% added 12.25 points, or 0.2%, to 4,820.75.

Analysts at Vetr Inc. downgraded shares of Encana Corp. (NYSE: ECA) from Buy to Hold in a research note to investors today. The company currently has a rating of Hold on the shares. As a means of comparison, 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 $12.57, higher than the opening price of $12.09. Encana Corp. stock has a 52-week high of $12.35. Material and fundamental digressions in the company’s procedures, future vision or industry can cause downgrades as the analysts consider that the future prospects for the security have diminished from the initial recommendation.

Shares of Encana Corp. (NYSE: ECA) opened at $12.09 on Monday trading between $12.09 and $12.35, and last traded at $12.22, a spike of $0.54 or 4.62% over the previous closing price.

Encana Corp. (NYSE: ECA) now has a market cap of 11.89B.

Encana Corp. (NYSE: ECA) Average Daily Trading Volume

1,610,502 shares crossed the trading desk yesterday, below normal, out of a total float 885,322,000. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to pinpoint substantial volume accumulation or distribution by institutional investors.

As with all potential breakouts, investors watch for volume to be at least 40%-50% greater than normal on the breakout to show that fund managers and other professional investors are jumping in.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These instituitional investors retain teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Encana Corp. (NYSE: ECA) 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 can make the best trades when they track the trading habits of professional investors.

With that in mind, Encana Corp. (NYSE: ECA) now has a 50-day MA of $10.61 and 200-day MA of $8.96. It has traded in a 52-week range between $3.00 – 12.3500 and today’s last price is 1.06%% lower than the 52 week high of $12.35.

Earnings growth is an important factor to consider when buying stocks and investors identify companies that have been successful at growing their earnings at least 25% or more for 3 consecutive years.

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