Pure Storage Inc. (NYSE: PSTG) 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 Pure Storage Inc. (NYSE: PSTG) from Strong-Buy to Buy in a research note to investors today. With a rating of Buy on the stock, Pure Storage Inc. has a 52-week high of $16.40. As a means of comparison, a number of other analysts have commented on the stock in recent days, and Pure Storage Inc. has earned a consensus one-year price target of $16.93, above the opening price of $12.05. Downgrades are more likely when analysts consider that the future prospects for the security have diminished from the original recommendation, usually because of a material and crucial change in the company’s procedures, future outlook or industry.
Yesterday Pure Storage Inc. (NYSE: PSTG) shares last traded at $12.07, which represents a jump of $0.05 over the previous closing price. Opening at $12.05, they ranged from $12.01 and $12.20 throughout the day.
Pure Storage Inc. (NYSE: PSTG) now has a market cap of 2.41B.
Pure Storage Inc. (NYSE: PSTG) Average Daily Trading Volume
173,337 shares crossed the trading desk yesterday, 30 percent below the norm, out of a total float 50,760,000. 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.
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 professional investors retain substantial teams of analysts researching thousands of stocks, so it is good corroboration to see them buying a stock you’re researching.
Pure Storage Inc. (NYSE: PSTG) 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, Pure Storage Inc. (NYSE: PSTG) now has a 50-day MA of $11.92 and 200-day MA of $12.64. It has traded in a 52-week range between $9.62 – 16.40 and today’s last price is 26.40%% lower than the 52 week high of $16.40.
Earnings growth is a critical factor to consider when investing in stocks and investors seek companies that have raised their earnings by at least 25% for a 3 year period.
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