Inovalon Holdings Inc. (INOV) Shares Slip, Investors Watching Closely, Here is Why

Inovalon Holdings Inc. (NASDAQ: INOV) shares fell on Tuesday Dec 13 with heavier trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile, the Dow DJIA, +0.47% climbed 106 points, or 0.6%, to 19,905. If the Dow finishes higher, it will notch its seventh straight gain.

The S&P 500 index SPX, +0.56% gained 10.45 points, or 0.5%, to 2,267 and the tech-heavy Nasdaq Composite Index COMP, +1.02% added 48 points, or 0.9%, to 5,461.

Both the S&P 500 index SPX, +0.56% and Nasdaq Composite COMP, +1.02% ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting

Analysts at Wells Fargo & Co. downgraded shares of Inovalon Holdings Inc. (NASDAQ: INOV) from Outperform to Market Perform in a research note to investors today. The company currently has a rating of Market Perform on the stock. As a means of comparison, a number of other analysts have issued reports on the company in recent days, and the company has earned a consensus one-year price target of $15.13, higher than the opening price of $9.35. Inovalon Holdings Inc. stock has a 52-week high of $20.34. Downgrades are more likely when analysts believe that the future prospects for the security have diminished from the original recommendation, often due to a considerable and major change in the company’s operations, future vision or industry.

Inovalon Holdings Inc. (NASDAQ: INOV) shares last traded at $9.59, which is a dip of $5.26 per share or -35.40% from the previous closing price. Opening at $9.35, they fluctuated from $9.25 and $9.90 throughout the day.

Inovalon Holdings Inc. (NASDAQ: INOV) now has a market cap of 1.41B.

Inovalon Holdings Inc. (NASDAQ: INOV) Average Daily Trading Volume

2,630,913 shares crossed the trading desk yesterday, higher than the average, out of a total float 53,808,000. Substantial gains in trading volume and price growth together could mean heavy volume aggregation 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 have teams of analysts that research thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.

Inovalon Holdings Inc. (NASDAQ: INOV) 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 more useful judgments on trades when they follow the trading habits of professional investors.

Trades for Inovalon Holdings Inc. (NASDAQ: INOV) have ranged from $9.25 – 20.3400, and the stock now has a 50-day MA of $14.86 and 200-day MA of $16.13. Today’s last price is 52.84%% lower than the 52 week high of $20.34.

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

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