Sunoco LP (SUN) Stock Moves Down and Here’s Why

Sunoco LP (NYSE: SUN) shares fell 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.

Shares of Sunoco LP (NYSE: SUN) were downgraded by analysts at Vetr Inc. in a note to their investors today. With a rating of Hold on the shares, the company has a 52-week high of $37.25. A number of other analysts have issued reports on the company in recent days, and Sunoco LP has secured a consensus one-year price target of $31.00, above the opening price of $27.40. Downgrades occur when analysts consider that the future prospects for the security have diminished from the original recommendation, usually due to an important and major change in the company’s procedures, future outlook or industry.

Yesterday Sunoco LP (NYSE: SUN) shares last traded at $27.06, a dip of $0.31 over the previous closing price. Opening at $27.40, they varied from $27.00 and $27.50 throughout the day.

Sunoco LP (NYSE: SUN) now has a market cap of 3.03B.

Sunoco LP (NYSE: SUN) Average Daily Trading Volume

68,036 shares traded hands yesterday, 17 percent below normal, out of a total float 47,374,000. lower than normal. Look for trading volume to pick up in the coming days as momentum 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 is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

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

Sunoco LP (NYSE: SUN) 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 traders to make those trends work in their favor and increase the number of successful trades.

Trades for Sunoco LP (NYSE: SUN) have ranged from $21.01 – 37.25, and the stock now has a 50-day MA of $24.67 and 200-day MA of $28.10. Today’s last price is 27.36%% under the 52 week high of $37.25.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors look for companies that have grown their earnings by at least 25% for 3 consecutive years.

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