Lowe’s Cos. (LOW) Shares Slip, Investors Watching Closely, Here is Why

Lowe’s Cos. (NYSE: LOW) shares rose 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 Lowe’s Cos. (NYSE: LOW) were downgraded by analysts at Citigroup Inc. in a note to their investors today. The company currently has a rating of Neutral on the stock. The one-year price target of $79.71 is above the opening price of $72.62, that has caused a number of other analysts to comment on the stock recently. Looking back over the last 52 weeks, Lowe’s Cos. stock has a high of $83.65. Considerable and major digressions in the company’s procedures, future outlook or industry can cause downgrades as the analysts believe that the future prospects for the security have weakened from the original recommendation.

Shares of Lowe’s Cos. (NYSE: LOW) opened at $72.62 on Tuesday trading between $72.56 and $73.52, and last traded at $73.30, which represents an increase of $0.34 or 0.47% from the previous closing price.

Lowe’s Cos. (NYSE: LOW) currently has a market cap of 63.76B.

Lowe’s Cos. (NYSE: LOW) Average Daily Trading Volume

The stock’s average daily volume is 6,635,120 shares out of a total float 868,498,000 and some 709,572 shares crossed the trading desk yesterday, lower than normal. Investors often use swings in trading volume to determine heavy volume aggregation or distribution by institutional investors, so trading volume is likely to increase in the next few days.

While increased trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a series of days or weeks expresses a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

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

Institutional investors such as these have substantial teams of analysts that research thousands of stocks, so it is good corroboration to see them buying a stock you are considering.

Lowe’s Cos. (NYSE: LOW) 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 educated trades when they follow the activity of professional investors.

With that in mind, Lowe’s Cos. (NYSE: LOW) now has a 50-day MA of $70.42 and 200-day MA of $75.08. It has traded in a 52-week range between $62.62 – 83.65 and today’s last price is 12.37%% lower than the 52 week high of $83.65.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors seek companies that have grown their earnings at least 25% or more for the past 3 years.

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