Yahoo Inc. (NASDAQ: YHOO) shares fell on Tuesday Nov 29 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.
U.S. stocks on Tuesday morning traded near break-even levels, with the main benchmarks switching in and out of negative territory
The Dow Jones Industrial Average DJIA, -0.09% was flat at 19,102. Meanwhile, the Nasdaq Composite COMP, +0.00% traded 18 points, or 0.1%, at 5,362.
The S&P 500 index SPX, -0.04% was off by 0.1%, or 2 points, at 2,199, with five of the 11 main sectors trading lower.
Analysts at Vetr Inc. downgraded shares of Yahoo Inc. (NASDAQ: YHOO) from Strong-Buy to Buy in a research note to investors today. With a rating of Buy on the shares, Yahoo Inc. has a 52-week high of $44.92. As a means of comparison, a number of other analysts have issued reports on the stock in recent days, and the company has earned a consensus one-year price target of $45.46, higher than the opening price of $41.43. Downgrades are more likely when analysts consider that the future prospects for the security have weakened from the original recommendation, often because of an important and integral change in the company’s actions, future direction or industry.
Shares of Yahoo Inc. (NASDAQ: YHOO) opened at $41.43 on Tuesday trading between $41.14 and $41.46, and last traded at $41.16, a decrease of $0.29 per share or -0.70% compared to the previous closing price.
Yahoo Inc. (NASDAQ: YHOO) currently has a market cap of 39.27B.
Yahoo Inc. (NASDAQ: YHOO) Average Daily Trading Volume
The stock’s average daily volume is 10,379,200 shares out of a total float 794,976,000 and some 445,270 shares crossed the trading desk yesterday, lower than the norm. Trading volume is likely to increase in the next few days as investors often use swings in trading volume to identify large volume accumulation or circulation by institutional investors.
However, one day of significant buy side trading is not enough to determine a trend. As such, market traders will continue to watch for institutional sponsorship as a signal that financial institutions are moving forward.
Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Professional investors such as these have substantial teams of analysts that research thousands of stocks, so it is good confirmation to see them taking a postion in a stock you are researching.
Yahoo Inc. (NASDAQ: YHOO) 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 traders to make those trends work in their favor and increase the number of winning trades.
With that in mind, Yahoo Inc. (NASDAQ: YHOO) now has a 50-day MA of $41.44 and 200-day MA of $40.21. It has traded in a 52-week range between $26.15 – 44.92 and today’s last price is 8.37%% lower than the 52 week high of $44.92.
Earnings growth is a crucial factor to research when investing in stocks and investors seek companies that have raised their earnings at least 25% or more over a 3 year period.
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