Sanchez Energy Corp. (SN) Shares Slip, Investors Watching Closely, Here is Why

Zacks Investment Research (Sanchez Energy Corp.: NYSE) shares fell on Wednesday Dec 28 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, U.S. stocks were little changed on Wednesday, as investors found few reasons to keep pushing shares higher towards the 20,000 mark.

The Dow Jones Industrial Average DJIA, -0.11% rose 3.1 points to 19,949, essentially unchanged on the day. The S&P 500 SPX, -0.39% lost 3 points, or 0.1%, to 2,266 while the Nasdaq Composite Index COMP, -0.59% slipped 6.4 points, or 0.1%, to 5,482.

Shares of Zacks Investment Research (Sanchez Energy Corp.: NYSE) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Hold on the stock, Sanchez Energy Corp. has a 52-week high of $10.14. As a means of comparison, a number of other analysts have spoken on the company in recent days, and Sanchez Energy Corp. has secured a consensus one-year price target of $8.93, lower than the opening price of $9.64. Downgrades occur when analysts feel that the future prospects for the security have weakened from the initial recommendation, usually caused by an important and fundamental digression in the company’s operations, future outlook or industry.

Shares of Zacks Investment Research (Sanchez Energy Corp.: NYSE) opened at $9.64 on Tuesday and has traded in a range between, $9.49 and $9.64, and last traded at $9.53, a dip of $0.03 per share or -0.31% compared to the previous closing price.

Zacks Investment Research (Sanchez Energy Corp.: NYSE) currently has a market cap of 564.42M.

Zacks Investment Research (Sanchez Energy Corp.: NYSE) Average Daily Trading Volume

The stock’s average daily volume is 2,456,890 shares out of a total float 48,779,000 and some 53,585 shares traded hands yesterday, lower than the average. Trading volume is likely to increase in the next few days as swing traders often use increases in trading volume to determine large volume accumulation or dissemination by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% greater than normal on the breakout to indicate 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.

Professional investors such as these retain substantial teams of analysts that investigate thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.

Zacks Investment Research (Sanchez Energy Corp.: NYSE) 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 following the activity of these professional investors—and the moving averages they influence—it allows for traders to make more effective decisions on trades.

Trades for Zacks Investment Research (Sanchez Energy Corp.: NYSE) have ranged from $2.06 – 10.14, and the stock now has a 50-day MA of $8.35 and 200-day MA of $7.80. Today’s last price is 6.02%% under the 52 week high of $10.14.

Earnings growth is an important factor to look at when buying stocks and investors identify companies that have grown their earnings by at least 25% over a 3 year period.

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