Pool Corp. (POOL) Stock Moves Down and Here’s Why

Pool Corp. (NASDAQ: POOL) shares rose on Monday Dec 5 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 Industrials on Monday opened at an all-time high as investors dismissed concerns about the outcome of Italy’s referendum on Sunday.

The Dow Jones Industrial Average rose DJIA, +0.41% 85 points, or 0.5%, at 19,260, the S&P 500 index SPX, +0.42% began trade 9 points, or 0.4%, higher at 2,201, while the Nasdaq Composite Index COMP, +0.43% advanced 27 points, or 0.5%, at 5,282.

Shares of Pool Corp. (NASDAQ: POOL) were downgraded by analysts at Zacks Investment Research in a note to their investors today. The company currently has a rating of Hold on the stock. The one-year price target of $105.20 is above the opening price of $99.76, causing a number of other analysts to issue statements on the stock recently. Looking back over the last 52 weeks, Pool Corp. stock has a high of $103.55. Downgrades are more common when analysts consider that the future prospects for the security have weakened from the original recommendation, often caused by a material and major change in the company’s procedures, future outlook or industry.

Pool Corp. (NASDAQ: POOL) shares last traded at $101.04, which is a spike of $1.18 or 1.18% compared to the previous closing price. Opening at $99.76, they varied from $99.76 and $101.96 throughout the day.

Pool Corp. (NASDAQ: POOL) now has a market cap of 4.18B.

Pool Corp. (NASDAQ: POOL) Average Daily Trading Volume

The stock’s average daily volume is 286,650 shares out of a total float 39,446,000 and some 5,606 shares traded hands yesterday, below the norm. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to identify substantial volume growth or dissemination by institutional investors.

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

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

Professional investors such as these retain teams of analysts that research thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Pool Corp. (NASDAQ: POOL) 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 traders to make those trends work in their favor and increase the number of successful trades.

With that in mind, Pool Corp. (NASDAQ: POOL) now has a 50-day MA of $95.24 and 200-day MA of $95.40. It has traded in a 52-week range between $72.40 – 103.55 and today’s last price is 2.42%% lower than the 52 week high of $103.55.

Earnings growth is a crucial factor to consider when investing in stocks and investors identify companies that have grown their earnings by at least 25% for 3 consecutive years.

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