Pandora Media Inc. (P) Shares Slip, Investors Watching Closely, Here is Why

Pandora Media Inc. (NYSE: P) 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 Pandora Media Inc. (NYSE: P) from Strong-Buy to Buy in a research note to investors today. Vetr Inc. currently has a rating of Buy on the shares. The one-year price target of $14.48 is higher than the opening price of $13.26, causing a fair amount of other analysts to report on the stock recently. Looking back over the last 52 weeks, Pandora Media Inc. stock has a high of $14.98. Downgrades happen when analysts feel that the future prospects for the security have weakened from the original recommendation, usually caused by an important and crucial change in the company’s operations, future vision or industry.

Yesterday Pandora Media Inc. (NYSE: P) shares last traded at $13.43, which is a jump of $0.18 over the previous closing price. Opening at $13.26, they ranged from $13.22 and $13.50 throughout the day.

Pandora Media Inc. (NYSE: P) now has a market cap of 3.13B.

Pandora Media Inc. (NYSE: P) Average Daily Trading Volume

1,135,653 shares crossed the trading desk yesterday, 117 percent below the norm, out of a total float 206,270,000. 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.

However, a single day of heavy buy side trading is not enough to assert a trend. As such, market traders will continue to watch for institutional sponsorship as a signal that financial institutions are moving forward.

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

Professional investors such as these retain teams of analysts that investigate thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re considering.

Pandora Media Inc. (NYSE: P) 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.

With that in mind, Pandora Media Inc. (NYSE: P) now has a 50-day MA of $13.07 and 200-day MA of $12.93. It has traded in a 52-week range between $7.10 – 14.98 and today’s last price is 10.35%% lower than the 52 week high of $14.98.

Indeed, earnings growth is among the most crucial things to look at in regards to stock investing and, accordingly, investors watch for companies that have grown their earnings at least 25% or more for the past 3 years.

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