Endologix Inc. (ELGX) Shares Slip, Investors Watching Closely, Here is Why

Endologix Inc. (NASDAQ: ELGX) shares fell 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 BMO Capital Markets downgraded shares of Endologix Inc. (NASDAQ: ELGX) from Outperform to Market Perform in a research note to investors today. With a rating of Market Perform on the stock, the company has a 52-week high of $14.49. A number of other analysts have issued reports on the company in recent days, and Endologix Inc. has secured a consensus one-year price target of $11.55, higher than the opening price of $7.68. Material and integral changes in the company’s procedures, future direction or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the original recommendation.

Shares of Endologix Inc. (NASDAQ: ELGX) opened at $7.68 on Monday and traded in a range between, $7.43 and $7.74, and last traded at $7.49, which represents a decrease of $0.33 per share or -4.22% compared to the previous closing price.

Endologix Inc. (NASDAQ: ELGX) currently has a market cap of 619.36B.

Endologix Inc. (NASDAQ: ELGX) Average Daily Trading Volume

The stock’s average daily volume is 1,121,120 shares out of a total float 75,588,000 and some 439,415 shares traded hands yesterday, below normal. Look for trading volume to pick up in the coming days as investors often use increases in trading volume to identify heavy volume growth or circulation by institutional investors.

As with all potential breakouts, investors look 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 just 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 ensure you are buying the right stocks.

Endologix Inc. (NASDAQ: ELGX) 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 successful trades.

With that in mind, Endologix Inc. (NASDAQ: ELGX) now has a 50-day MA of $11.31 and 200-day MA of $12.23. It has traded in a 52-week range between $6.22 – 14.49 and today’s last price is 48.33%% lower than the 52 week high of $14.49.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors identify companies that have been successful at growing their earnings by at least 25% over 3 consecutive years.

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