Merck & Co. (NYSE: MRK) shares fell on Monday Dec 19 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, the Dow Jones Industrial Average DJIA, +0.22% was trading up 37 points, or 0.2%, at 19,879, inching up to break the psychologically important 20,000 level.
The S&P 500 index SPX, +0.20% was up 6 points, or 0.3% at 2,264, with nine of the 11 main sectors trading higher.
The Nasdaq Composite Index COMP, +0.32% added 18 points, or 0.3% to 5,455.
Shares of Merck & Co. (NYSE: MRK) were downgraded by analysts at Jefferies Group in a note to their investors today. The company currently has a rating of Underperform on the stock. The one-year price target of $68.00 is higher than the opening price of $61.80, that has caused a number of other analysts to comment on the company in recent days. Looking back over the last 52 weeks, Merck & Co. stock has a high of $65.46. Considerable and major 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 dropped from the original recommendation.
Merck & Co. (NYSE: MRK) shares last traded at $61.81, which is a dip of $0.64 per share or -1.02% compared to the previous closing price. Opening at $61.80, they varied from $61.56 and $62.27 throughout the day.
Merck & Co. (NYSE: MRK) currently has a market cap of 170.40B.
Merck & Co. (NYSE: MRK) Average Daily Trading Volume
1,159,537 shares crossed the trading desk yesterday, below the norm, out of a total float 2,755,841,000. Investors often use upticks in trading volume to pinpoint large volume aggregation or distribution by institutional investors, so trading volume is likely to increase in the next few days.
While an increase in trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a period of days or weeks delivers a positive signal to market traders that institutions may be moving in, so institutional sponsorship is critical.
Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These instituitional investors retain substantial teams of analysts that investigate thousands of stocks. Thus, watching their interests is a good way to ensure you are buying the right stocks.
Merck & Co. (NYSE: MRK) 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 identifying trends, moving averages allow investors to make those trends work in their favor and increase the number of successful trades.
Trades for Merck & Co. (NYSE: MRK) have ranged from $47.97 – 65.460, and the stock now has a 50-day MA of $61.37 and 200-day MA of $60.65. Today’s last price is 5.58%% below the 52 week high of $65.46.
Earnings growth is a crucial factor to research when buying stocks and investors identify companies that have been successful at growing their earnings by at least 25% for 3 consecutive years.
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