Nvidia Corp. (NASDAQ: NVDA) 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.
Analysts at Vetr Inc. downgraded shares of Nvidia Corp. (NASDAQ: NVDA) from Buy to Hold in a research note to investors today. With a rating of Hold on the stock, Nvidia Corp. has a 52-week high of $100.70. A number of other analysts have issued reports on the company recently, and Nvidia Corp. has secured a consensus one-year price target of $89.24, less than the opening price of $99.70. Considerable and major changes 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 initial recommendation.
Nvidia Corp. (NASDAQ: NVDA) shares last traded at $100.49, which represents an increase of $0.08 or 0.08% from the previous closing price. Opening at $99.70, they varied from $99.00 and $100.65 throughout the day.
Nvidia Corp. (NASDAQ: NVDA) now has a market cap of 54.16B.
Nvidia Corp. (NASDAQ: NVDA) Average Daily Trading Volume
3,102,201 shares traded hands yesterday, below normal, out of a total float 514,394,000. Momentum traders often use increases in trading volume to determine substantial volume growth or distribution by institutional investors, so look for trading volume to pick up in the coming days.
While higher 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 sends a positive cue to market traders that institutions may be moving in, so institutional sponsorship is crucial.
Institutional sponsorship simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These instituitional investors have teams of analysts researching thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.
Nvidia Corp. (NASDAQ: NVDA) 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 the best trades when they follow the activity of professional investors.
With that in mind, Nvidia Corp. (NASDAQ: NVDA) now has a 50-day MA of $85.79 and 200-day MA of $64.88. It has traded in a 52-week range between $24.75 – 100.70 and today’s last price is 0.21%% lower than the 52 week high of $100.70.
Earnings growth is a critical factor to look at when buying stocks and investors watch for companies that have grown their earnings by at least 25% over the past 3 years.
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