New Gold Inc. (NGD) shares fall following downgrade at Zacks Investment Research

New Gold Inc. (NYSE: NGD) shares rose on Thursday February 2 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, The Dow Jones Industrial Average DJIA, -0.10% fell 34 points, or 0.2%, to 19,858. The S&P 500 SPX, -0.11% lost 4 points to 2,276, a drop of 0.2%. The Nasdaq Composite Index COMP, -0.05% slid 16 points, or 0.3%, to 5,626. Among the most actively traded Nasdaq stocks was Facebook Inc FB, +0.31% which fell 0.7% a day after it reported its quarterly results.

Analysts at Zacks Investment Research downgraded shares of New Gold Inc. (NYSE: NGD) from Hold to Sell in a research note to investors today. Zacks Investment Research currently has a rating of Sell on the stock. 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 $3.98, higher than the opening price of $2.99. New Gold Inc. stock has a 52-week high of $6.04. considerable and major digressions in the company’s operations, future direction or industry can cause downgrades as the analysts consider that the future prospects for the security have weakened from the initial recommendation.

Shares of New Gold Inc. (NYSE: NGD) opened at $2.99 yesterday and traded in a range between, $2.85 and $2.99, and last traded at $2.89, which represents a jump of $0.04 from the previous closing price.

New Gold Inc. (NYSE: NGD) currently has a market cap of 1.48B.

New Gold Inc. (NYSE: NGD) Average Daily Trading Volume

The stock’s average daily volume is 6,420,380 shares out of a total float 498,158,000 and some 2,187,543 shares traded hands yesterday, 111 percent below the norm. lower than normal. Look for trading volume to pick up in the coming days as investors 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, conversely, 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 simply refers to ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Professional investors such as these have substantial teams of analysts that investigate thousands of stocks. Thus, watching their interests is a good way to make sure you are buying the right stocks.

New Gold Inc. (NYSE: NGD) 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, New Gold Inc. (NYSE: NGD) now has a 50-day MA of $3.64 and 200-day MA of $4.28. It has traded in a 52-week range between $2.39 – 6.04 and today’s last price is 52.12%% lower than the 52 week high of $6.04.

Earnings growth is a critical factor to look at when buying stocks and investors seek companies that have increased their earnings by at least 25% over a 3 year period.

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