Power Integrations Inc. (POWI) Shares Slip, Investors Watching Closely, Here is Why

Power Integrations Inc. (NASDAQ: POWI) shares traded mostly flat 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 Power Integrations Inc. (NASDAQ: POWI) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Hold on the shares, Power Integrations Inc. has a 52-week high of $70.00. A number of other analysts have issued reports on the stock in recent days, and Power Integrations Inc. has secured a consensus one-year price target of $74.00, higher than the opening price of $68.00. Considerable and crucial digressions in the company’s operations, future outlook or industry can cause downgrades as the analysts feel that the future prospects for the security have dropped from the original recommendation.

Shares of Power Integrations Inc. (NASDAQ: POWI) opened at $68.00 on Tuesday trading between $67.45 and $68.00, and last traded at $67.80.

Power Integrations Inc. (NASDAQ: POWI) now has a market cap of 1.98B.

Power Integrations Inc. (NASDAQ: POWI) Average Daily Trading Volume

5,403 shares traded hands yesterday, lower than the norm, out of a total float 28,232,000. Look for trading volume to pick up in the coming days as momentum traders often use swings in trading volume to pinpoint substantial volume accumulation or distribution 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 period of days or weeks delivers a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is critical.

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

Institutional investors such as these retain teams of analysts researching thousands of stocks, so it is good validation to see them buying a stock you’re researching.

Power Integrations Inc. (NASDAQ: POWI) 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.

Trades for Power Integrations Inc. (NASDAQ: POWI) have ranged from $39.53 – 70.00, and the stock now has a 50-day MA of $67.05 and 200-day MA of $60.10. Today’s last price is 3.14%% under the 52 week high of $70.00.

Indeed, earnings growth is among the most critical things to look at in regards to stock investing and, accordingly, investors seek companies that have been successful at growing their earnings by at least 25% over the past 3 years.

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