WD-40 Company (WDFC) Stock Moves Down and Here’s Why

WD-40 Company (NASDAQ: WDFC) 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.

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 downgraded shares of WD-40 Company (NASDAQ: WDFC) from Hold to Sell in a research note to investors today. With a rating of Sell on the stock, the company has a 52-week high of $125.00. A number of other analysts have commented on the company recently, and the company has secured a consensus one-year price target of $114.67, above the opening price of $103.05. Downgrades occur when analysts feel that the future prospects for the security have weakened from the original recommendation, often caused by a material and fundamental digression in the company’s actions, future outlook or industry.

Yesterday WD-40 Company (NASDAQ: WDFC) shares last traded at $102.70, which represents a decrease of $0.50 compared to the previous closing price. Opening at $103.05, they ranged from $102.05 and $103.28 throughout the day.

WD-40 Company (NASDAQ: WDFC) now has a market cap of 1.46B.

WD-40 Company (NASDAQ: WDFC) Average Daily Trading Volume

18,632 shares crossed the trading desk yesterday, 59 percent below the norm, out of a total float 13,721,000. 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.

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

Professional investors such as these have teams of analysts that research thousands of stocks. So watching their interests is a good way to make sure you are buying the right stocks.

WD-40 Company (NASDAQ: WDFC) 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 tracking the activity of these professional investors—and the moving averages they affect—it allows for traders to make more effective decisions on trades.

With that in mind, WD-40 Company (NASDAQ: WDFC) now has a 50-day MA of $112.73 and 200-day MA of $113.58. It has traded in a 52-week range between $95.46 – 125.00 and today’s last price is 17.84%% lower than the 52 week high of $125.00.

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

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