Globe Specialty Metals Inc. (GSM) shares fall following downgrade at Zacks Investment Research

Globe Specialty Metals Inc. (NASDAQ: GSM) shares rose 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 Zacks Investment Research downgraded shares of Globe Specialty Metals Inc. (NASDAQ: GSM) from Buy to Hold in a research note to investors today. With a rating of Hold on the shares, Globe Specialty Metals Inc. has a 52-week high of $13.17. A number of other analysts have commented on the company recently, and the company has earned a consensus one-year price target of $14.63, above the opening price of $11.79. Material and crucial changes in the company’s actions, future direction or industry can cause downgrades as the analysts believe that the future prospects for the security have diminished from the initial recommendation.

Shares of Globe Specialty Metals Inc. (NASDAQ: GSM) opened at $11.79 on Monday and traded in a range between, $11.62 and $12.03, and last traded at $11.87, a spike of $0.15 or 1.28% from the previous closing price.

Globe Specialty Metals Inc. (NASDAQ: GSM) currently has a market cap of 2,039.72B.

Globe Specialty Metals Inc. (NASDAQ: GSM) Average Daily Trading Volume

The stock’s average daily volume is 755,814 shares out of a total float 65,404,000 and some 21,543 shares crossed the trading desk yesterday, lower than the norm. Look for trading volume to pick up in the coming days as investors often use upticks in trading volume to identify large volume growth or distribution by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% above normal on the breakout to show 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 have substantial teams of analysts researching thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.

Globe Specialty Metals Inc. (NASDAQ: GSM) 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 marking the activity of these professional investors and how they influence moving averages, traders can make educated trades.

Trades for Globe Specialty Metals Inc. (NASDAQ: GSM) have ranged from $6.90 – 13.17, and the stock now has a 50-day MA of $9.35 and 200-day MA of $9.02. Today’s last price is 9.86%% lower than the 52 week high of $13.17.

Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors identify companies that have grown their earnings by at least 25% for the past 3 years.

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