NETGEAR, Inc. (NTGR) Stock Moves Down and Here’s Why

NETGEAR, Inc. (NASDAQ: NTGR) shares traded mostly flat on Tuesday February 14 on 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 opened slightly lower on Tuesday. The main three benchmarks retreated after touching the latest in a series of record highs on Monday, with the S&P 500 index SPX, -0.09% down two points, or 0.1%, to 2,326.

The Dow Jones Industrial Average DJIA, -0.02% fell 34 points, or 0.2%, to 20,381. The Nasdaq Composite Index COMP, -0.13% shed eight points, or 0.1%, to 5,756.

Analysts at Zacks Investment Research downgraded shares of NETGEAR, Inc. (NASDAQ: NTGR) from Hold to Strong Sell in a research note to investors today. The company currently has a rating of Strong Sell on the shares. A number of other analysts have issued reports on the company recently, and NETGEAR, Inc. has secured a consensus one-year price target of $65.33, higher than the opening price of $53.95, a difference of 12.04 percent. NETGEAR, Inc. stock has a 52-week high of $60.82. Material and integral digressions in the company’s actions, future direction or industry can cause downgrades as the analysts feel that the future prospects for the security have dropped from the original recommendation.

Yesterday NETGEAR, Inc. (NASDAQ: NTGR) shares last traded at $54.25. Opening at $53.95, they ranged from $53.75 and $54.40 throughout the day.

NETGEAR, Inc. (NASDAQ: NTGR) now has a market cap of 1.79B.

NETGEAR, Inc. (NASDAQ: NTGR) Average Daily Trading Volume

20,742 shares crossed the trading desk yesterday, 78 percent below the average, out of a total float 32,356,000. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to identify heavy volume accumulation or distribution by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% higher than normal on the breakout to show that fund managers and other professional investors are jumping in.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These professional investors retain substantial teams of analysts that research thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.

NETGEAR, Inc. (NASDAQ: NTGR) 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 winning trades.

Trades for NETGEAR, Inc. (NASDAQ: NTGR) have ranged from $36.10 – 60.82, and the stock now has a 50-day MA of $55.76 and 200-day MA of $54.99. Today’s last price is 10.80%% lower than the 52 week high of $60.82.

Earnings growth is a critical factor to look at when buying stocks and investors identify companies that have been successful at growing their earnings at least 25% or more for the past 3 years.

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