Capital One Financial Corp. (COF) Shares Slip, Investors Watching Closely, Here is Why

Capital One Financial Corp. (NYSE: COF) 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 Robert W. Baird downgraded shares of Capital One Financial Corp. (NYSE: COF) from Outperform to Neutral in a research note to investors today. With a rating of Neutral on the stock, the company has a 52-week high of $83.82. The one-year price target of $81.67 is above the opening price of $80.25, causing a fair amount of other analysts to issue statements on the stock recently. Considerable and integral changes in the company’s procedures, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have dropped from the initial recommendation.

Shares of Capital One Financial Corp. (NYSE: COF) opened at $80.25 on Monday and traded in a range between, $79.32 and $81.14, and last traded at $80.94, which represents an increase of $0.72 or 0.90% over the previous closing price.

Capital One Financial Corp. (NYSE: COF) now has a market cap of 40.56B.

Capital One Financial Corp. (NYSE: COF) Average Daily Trading Volume

305,021 shares traded hands yesterday, below the norm, out of a total float 497,532,000. Investors often use upticks in trading volume to determine substantial volume aggregation or dissemination by institutional investors, so trading volume is likely to increase in the next few days.

While an increase in trading for short periods will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is crucial.

Institutional sponsorship just refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These professional investors retain teams of analysts researching thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re researching.

Capital One Financial Corp. (NYSE: COF) 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 investors to make those trends work in their favor and increase the number of winning trades.

With that in mind, Capital One Financial Corp. (NYSE: COF) now has a 50-day MA of $74.36 and 200-day MA of $70.09. It has traded in a 52-week range between $58.03 – 83.82 and today’s last price is 3.44%% lower than the 52 week high of $83.82.

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 grown their earnings by at least 25% over the past 3 years.

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