International Business Machines Corp. (NYSE: IBM) shares fell 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 International Business Machines Corp. (NYSE: IBM) from Hold to Sell in a research note to investors today. With a rating of Sell on the stock, International Business Machines Corp. has a 52-week high of $171.25. As a means of comparison, a number of other analysts have spoken on the stock in recent days, and the company has earned a consensus one-year price target of $161.00, less than the opening price of $170.08, a difference of 9.45 percent. Downgrades are more common when analysts consider that the future prospects for the security have dropped from the initial recommendation, often caused by an important and fundamental digression in the company’s procedures, future outlook or industry.
Yesterday International Business Machines Corp. (NYSE: IBM) shares last traded at $170.39, a decrease of $0.16 over the previous closing price. Opening at $170.08, they fluctuated from $170.01 and $171.25 throughout the day.
International Business Machines Corp. (NYSE: IBM) now has a market cap of 161.63B.
International Business Machines Corp. (NYSE: IBM) Average Daily Trading Volume
The stock’s average daily volume is 3,632,540 shares out of a total float 866,697,000 and some 885,946 shares traded hands yesterday, 100 percent lower than the norm. lower than normal. Look for trading volume to pick up in the coming days as momentum traders often use upticks 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 that research thousands of stocks. Thus, watching their interests is a good way to ensure you are buying the right stocks.
International Business Machines Corp. (NYSE: IBM) 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, International Business Machines Corp. (NYSE: IBM) now has a 50-day MA of $166.61 and 200-day MA of $159.91. It has traded in a 52-week range between $116.90 – 171.25 and today’s last price is 0.50%% lower than the 52 week high of $171.25.
Earnings growth is a crucial factor to research when buying stocks and investors look for companies that have raised their earnings by at least 25% over the past 3 years.
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