Legacy Reserves LP (LGCY) Shares Slip, Investors Watching Closely, Here is Why

Legacy Reserves LP (LGCY) Shares Slip, Investors Watching Closely, Here is Why


Legacy Reserves LP (NASDAQ: LGCY) shares fell yesterday 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, stocks closed mostly higher on Wednesday as investors digested the comments from the Federal Reserve’s latest policy meeting underlined expectations for a possible rate hike in December.

The S&P 500 SPX, +0.11% gained 2.48 points, or 0.1%, to 2,139.21. The Dow Jones Industrial Average DJIA, +0.09% added 15.54 points, or 0.1%, to 18,144.20.

However, a sharp selloff in biotechnology stocks weighed on the Nasdaq Composite COMP, -0.15% with the index closing 7.77 points, or 0.2%, lower at 5,239.02.

Shares of Legacy Reserves LP (NASDAQ: LGCY) were downgraded by analysts at Zacks Investment Research in a note to their investors today. With a rating of Strong Sell on the stock, Legacy Reserves LP has a 52-week high of $5.39. The one-year price target of $1.89 is above the opening price of $1.38, that has caused a number of other analysts to report on the company recently. Important and fundamental digressions in the company’s operations, future vision or industry can cause downgrades as the analysts feel that the future prospects for the security have weakened from the original recommendation.

Legacy Reserves LP (NASDAQ: LGCY) shares last traded at $1.35, a drop of $0.04 per share or -2.88% from the previous closing price. Opening at $1.38, they varied from $1.32 and $1.38 throughout the day.

Legacy Reserves LP (NASDAQ: LGCY) now has a market cap of 97.75M.

Legacy Reserves LPTrading Volume

The stock’s average daily volume is 474,138 shares out of a total float 61,894,000 and some 162,600 shares traded hands yesterday, lower than the average. Trading volume is likely to increase in the next few days as swing traders often use upticks in trading volume to determine large volume growth or distribution by institutional investors.

While higher trading for one day will not mean much, however, a trend of heavy trading volume on the buy side over a period of days or weeks delivers a positive indicator to market traders that institutions may be moving in, so institutional sponsorship is critical.

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, so it is good corroboration to see them taking a postion in a stock you are researching.

Legacy Reserves LP 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 spotting trends, moving averages allow investors to make those trends work in their favor and increase the number of winning trades.

Trades for Legacy Reserves LP (NASDAQ: LGCY) have ranged from $0.61 – 5.39, and the stock now has a 50-day MA of $1.47 and 200-day MA of $1.81. Today’s last price is 74.95%% under the 52 week high of $5.39.

Earnings growth is a critical factor to research when buying stocks and investors identify companies that have raised their earnings at least 25% or more for 3 consecutive years.

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Dan specializes in matters of money management and personal finance and has been published on numerous financial, business, health and wellness and sports websites.