Open Text Corporation (OTEX) Stock Moves Down and Here’s Why

Open Text Corporation (NASDAQ: OTEX) shares rose 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.

Shares of Open Text Corporation (NASDAQ: OTEX) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Hold on the shares, Open Text Corporation has a 52-week high of $35.07. The one-year price target of $39.39 is higher than the opening price of $33.64, that has caused a number of other analysts to issue statements on the stock in recent days. Downgrades happen when analysts consider that the future prospects for the security have diminished from the initial recommendation, often due to a considerable and integral change in the company’s actions, future direction or industry.

Shares of Open Text Corporation (NASDAQ: OTEX) opened at $33.64 yesterday and traded in a range between, $33.64 and $33.94, and last traded at $33.89, which represents an increase of $0.22 from the previous closing price.

Open Text Corporation (NASDAQ: OTEX) currently has a market cap of 8.88B.

Open Text Corporation (NASDAQ: OTEX) Average Daily Trading Volume

The stock’s average daily volume is 645,360 shares out of a total float 256,852,000 and some 51,575 shares traded hands yesterday, 38 percent below the norm. 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.

While increased trading for short periods will not mean much 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 signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

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

Institutional investors such as these have teams of analysts researching thousands of stocks. So watching their interests is a good way to ensure you are buying the right stocks.

Open Text Corporation (NASDAQ: OTEX) 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 successful trades.

With that in mind, Open Text Corporation (NASDAQ: OTEX) now has a 50-day MA of $32.45 and 200-day MA of $31.66. It has traded in a 52-week range between $23.91 – 35.07 and today’s last price is 3.36%% lower than the 52 week high of $35.07.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors identify companies that have increased their earnings at least 25% or more for a 3 year period.

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