Alcoa Corp. (NYSE: AA) shares rose on Monday January 23 on 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 flipped between small gains and losses in early trade on Monday.
The Dow Jones Industrial Average DJIA, -0.14% was off by 13 points, or less than 0.1%, at 19,815, with McDonald’s Corp MCD, -0.99% and General Electric CoGE, -0.95% leading the losses, down more than 1%.
The S&P 500 SPX, -0.18% slipped 2 point to 2,270, with five of the main sectors trading lower. The Nasdaq Composite COMP, -0.09% gained 4 points to 5,558.
Analysts at Vetr Inc. downgraded shares of Alcoa Corp. (NYSE: AA) from Sell to Strong Sell in a research note to investors today. The company currently has a rating of Strong Sell on the stock. A number of other analysts have spoken on the stock recently, and Alcoa Corp. has secured a consensus one-year price target of $33.13, lower than the opening price of $35.92, a difference of 9.20 percent. Alcoa Corp. stock has a 52-week high of $36.40. Downgrades are more likely when analysts believe that the future prospects for the security have diminished from the original recommendation, often due to an important and major digression in the company’s actions, future direction or industry.
Yesterday Alcoa Corp. (NYSE: AA) shares last traded at $36.01, a spike of $0.35 from the previous closing price. Opening at $35.92, they varied from $35.61 and $36.40 throughout the day.
Alcoa Corp. (NYSE: AA) now has a market cap of 6.59B.
Alcoa Corp. (NYSE: AA) Average Daily Trading Volume
829,283 shares crossed the trading desk yesterday, 17 percent lower than the norm, out of a total float 146,414,000. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use increases in trading volume to identify heavy volume accumulation or distribution by institutional investors.
While increased trading for short periods will not mean much will not mean much, however, 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.
These instituitional investors have substantial teams of analysts researching thousands of stocks, so it is good confirmation to see them buying a stock you are researching.
Alcoa Corp. (NYSE: AA) 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.
With that in mind, Alcoa Corp. (NYSE: AA) now has a 50-day MA of $30.90 and 200-day MA of $28.71. It has traded in a 52-week range between $20.00 – 36.40 and today’s last price is 1.06%% lower than the 52 week high of $36.40.
Earnings growth is a crucial factor to research when buying stocks and investors seek companies that have grown their earnings by at least 25% over 3 consecutive years.
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