Hovnanian Enterprises Inc (HOV) Shares Slip, Investors Watching Closely, Here is Why

Hovnanian Enterprises Inc (NYSE: HOV) shares rose in early trading yesterday lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

U.S. stocks flipped between small losses and gains early Tuesday morning as investors maintained a cautious stance following a sharp postelection rally.

The S&P 500 index SPX, -0.04% was off by about 1 point, or less than 0.1%, at 2,267, with seven of the 11 main sectors trading lower. The Dow Jones Industrial Average DJIA, -0.13% was off 33 points, or 0.2%, to 19,853.

Meanwhile, the Nasdaq Composite Index COMP, +0.05% traded in record territory, after closing at an all-time high for the second session in a row on Monday.

Analysts at Zacks Investment Research downgraded shares of Hovnanian Enterprises Inc (NYSE: HOV) from Buy to Hold in a research note to investors today. With a rating of Hold on the stock, Hovnanian Enterprises Inc has a 52-week high of $2.96. A number of other analysts have spoken on the company in recent days, and Hovnanian Enterprises Inc has earned a consensus one-year price target of $1.88, a decrease compared to the opening price of $2.74. Downgrades are more likely when analysts feel that the future prospects for the security have diminished from the original recommendation, often because of a considerable and crucial change in the company’s actions, future outlook or industry.

Yesterday Hovnanian Enterprises Inc (NYSE: HOV) shares last traded at $2.75, an increase of $0.03 compared to the previous closing price. Opening at $2.74, they varied from $2.72 and $2.78 throughout the day.

Hovnanian Enterprises Inc (NYSE: HOV) now has a market cap of 404.33M.

Hovnanian Enterprises Inc (NYSE: HOV) Average Daily Trading Volume

145,341 shares traded hands yesterday, 78 percent lower than the average, out of a total float 122,524,000. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.

As with all potential breakouts, investors look for volume to be at least 40%-50% higher than normal on the breakout to show that fund managers and other professional investors are jumping in.

Institutional sponsorship commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These instituitional investors retain substantial 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.

Hovnanian Enterprises Inc (NYSE: HOV) 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 spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.

Trades for Hovnanian Enterprises Inc (NYSE: HOV) have ranged from $1.19 – 2.960, and the stock now has a 50-day MA of $2.49 and 200-day MA of $1.90. Today’s last price is 7.26%% below the 52 week high of $2.96.

Earnings growth is an important factor to research when investing in stocks and investors identify companies that have been successful at growing their earnings at least 25% or more for a 3 year period.

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