Southwest Airlines Co. (LUV) shares fall following downgrade at Vetr Inc.

Southwest Airlines Co. (NYSE: LUV) 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.

Analysts at Vetr Inc. downgraded shares of Southwest Airlines Co. (NYSE: LUV) from Hold to Sell in a research note to investors today. The company currently has a rating of Sell on the stock. A number of other analysts have spoken on the company in recent days, and the company has secured a consensus one-year price target of $50.37, higher than the opening price of $48.08. Southwest Airlines Co. stock has a 52-week high of $51.34. Important and fundamental changes in the company’s procedures, future direction or industry can cause downgrades as the analysts consider that the future prospects for the security have weakened from the original recommendation.

Southwest Airlines Co. (NYSE: LUV) shares last traded at $48.14, which is a spike of $0.23 or 0.48% from the previous closing price. Opening at $48.08, they ranged from $47.95 and $48.46 throughout the day.

Southwest Airlines Co. (NYSE: LUV) now has a market cap of 29.63B.

Southwest Airlines Co. (NYSE: LUV) Average Daily Trading Volume

The stock’s average daily volume is 7,856,720 shares out of a total float 614,397,000 and some 473,718 shares traded hands yesterday, lower than normal. Momentum traders often use upticks in trading volume to pinpoint heavy volume aggregation or circulation by institutional investors, so look for trading volume to pick up in the coming days.

As with all possible breakouts, investors watch for volume to be at least 40%-50% above normal on the breakout to indicate 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 have teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

Southwest Airlines Co. (NYSE: LUV) 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.

Trades for Southwest Airlines Co. (NYSE: LUV) have ranged from $33.96 – 51.34, and the stock now has a 50-day MA of $43.48 and 200-day MA of $40.21. Today’s last price is 6.23%% lower than the 52 week high of $51.34.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors identify companies that have been successful at growing their earnings at least 25% or more for 3 consecutive years.

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