Sonic Corp. (NASDAQ: SONC) shares slid back in value on Wednesday January 18 on lighter trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.
Meanwhile, in early trade today, the S&P 500 SPX, +0.00% was off 2 points, or 0.1%, at 2,265, shortly after open. The Nasdaq Composite COMP, +0.20% was flat at 5,537. The Dow Jones Industrial Average DJIA, -0.20% slipped 54 points or 0.3%, to 19,770.
Analysts at Zacks Investment Research upgraded shares of Sonic Corp. (NASDAQ: SONC) from Hold to Buy today. The company currently has a rating of Buy on the shares. As a means of comparison, a number of other analysts have issued reports on the stock recently, and the company has secured a consensus one-year price target of $28.21, above the opening price of $25.46, a difference of 11.14 percent. Sonic Corp. stock has a 52-week high of $36.34. Usually, after analysts assign an upgrade report on a stock, they will subsequently issue sporadic updates, such as a price target change.
Yesterday Sonic Corp. (NASDAQ: SONC) shares last traded at $25.32, a dip of $0.02 compared to the previous closing price. Opening at $25.46, they ranged from $25.23 and $25.58 throughout the day.
Sonic Corp. (NASDAQ: SONC) now has a market cap of 1.11B.
Sonic Corp. (NASDAQ: SONC) Average Daily Trading Volume
73,238 shares crossed the trading desk yesterday, 53 percent below the average, out of a total float 38,197,000. 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 commonly refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These instituitional investors have teams of analysts that research thousands of stocks, so it is good confirmation to see them taking a postion in a stock you are considering.
Sonic Corp. (NASDAQ: SONC) 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 Sonic Corp. (NASDAQ: SONC) have ranged from $21.12 – 36.34, and the stock now has a 50-day MA of $27.01 and 200-day MA of $26.79. Today’s last price is 30.32%% below the 52 week high of $36.34.
Earnings growth is a crucial factor to look at when investing in stocks and investors identify companies that have been successful at growing their earnings at least 25% or more over 3 consecutive years.
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