Otonomy, Inc. (OTIC) stock down despite upgrade at Zacks Investment Research

Otonomy, Inc. (NASDAQ: OTIC) shares slid back in value in early trading today on slower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.

Meanwhile, U.S. stocks opened significantly lower in early trading. The Dow Jones Industrial Average was 58 points lower, or 0.29% to 19895, the S&P 500 fell 7 points, or 0.28% to 2268, while the Nasdaq dropped 22 points, or 0.38% to 5542.

Analysts at Zacks Investment Research upgraded shares of Otonomy, Inc. (NASDAQ: OTIC) from Sell to Hold today. The company currently has a rating of Hold on the stock. The one-year price target of $33.71 is higher than the opening price of $16.40, resulting a number of other analysts to comment on the company recently. Looking back over the last 52 weeks, Otonomy, Inc. stock has a high of $21.23. Share prices often shift to the upside on recommendations and new price targets of professional analysts.

Yesterday Otonomy, Inc. (NASDAQ: OTIC) shares last traded at $16.55, a drop of $0.05 compared to the previous closing price. Opening at $16.40, they ranged from $16.35 and $16.70 throughout the day.

Otonomy, Inc. (NASDAQ: OTIC) currently has a market cap of 499.71M.

Otonomy, Inc. (NASDAQ: OTIC) Average Daily Trading Volume

7,011 shares crossed the trading desk yesterday, 0 percent below the norm, out of a total float 23,837,000. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use upticks in trading volume to identify heavy volume accumulation or distribution by institutional investors.

While increased 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 sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

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

These instituitional investors have teams of analysts that investigate thousands of stocks, so it is good validation to see them buying a stock you are researching.

Otonomy, Inc. (NASDAQ: OTIC) 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 winning trades.

Trades for Otonomy, Inc. (NASDAQ: OTIC) have ranged from $10.50 – 21.23, and the stock now has a 50-day MA of $16.86 and 200-day MA of $16.49. Today’s last price is 22.03%% lower than the 52 week high of $21.23.

Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors seek companies that have increased their earnings by at least 25% for a 3 year period.

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