Penn National Gaming Inc. (PENN) Stock Moves Down and Here’s Why

Penn National Gaming Inc. (NASDAQ: PENN) shares rose on Thursday December 29 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, U.S. stocks were little changed in early trade Thursday. The S&P 500 SPX, +0.04% rose 0.1% to 2,252, while the Dow DJIA, +0.04% advanced 16 points to 19,850. The Nasdaq Composite COMP, -0.04% was virtually flat at 5,439.

Shares of Penn National Gaming Inc. (NASDAQ: PENN) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Sell on the shares, Penn National Gaming Inc. has a 52-week high of $17.40. A number of other analysts have issued reports on the stock in recent days, and Penn National Gaming Inc. has secured a consensus one-year price target of $17.64, higher than the opening price of $14.00. Downgrades occur when analysts feel that the future prospects for the security have dropped from the original recommendation, often due to a material and integral change in the company’s actions, future direction or industry.

Shares of Penn National Gaming Inc. (NASDAQ: PENN) opened at $14.00 on Tuesday trading between $13.90 and $14.16, and last traded at $14.02, which represents an increase of $0.01 or 0.07% from the previous closing price.

Penn National Gaming Inc. (NASDAQ: PENN) now has a market cap of 1.17B.

Penn National Gaming Inc. (NASDAQ: PENN) Average Daily Trading Volume

14,530 shares crossed the trading desk yesterday, lower than normal, out of a total float 70,429,000. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to determine large volume accumulation or distribution by institutional investors.

While an increase in trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a period of days or weeks sends 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.

These instituitional investors have teams of analysts researching thousands of stocks. Thus, watching their interests is a good way to ensure you are buying the right stocks.

Penn National Gaming Inc. (NASDAQ: PENN) 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 following the activity of these professional investors and how they influence moving averages,it allows for traders to make more effective decisions on trades.

Trades for Penn National Gaming Inc. (NASDAQ: PENN) have ranged from $11.93 – 17.40, and the stock now has a 50-day MA of $13.89 and 200-day MA of $13.90. Today’s last price is 19.43%% lower than the 52 week high of $17.40.

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

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