Nike Inc. (NKE) Shares Slip, Investors Watching Closely, Here is Why

Nike Inc. (NYSE: NKE) shares rose on Thursday Nov 20 with 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 opened flat this morning, struggling for direction in early trade ahead of congressional testimony by Federal Reserve Chairwoman Janet Yellen. Ahead of an appearance before the Joint Economic Committee, Yellen said an interest-rate hike could come “relatively soon,”

The S&P 500 SPX, +0.25% fell less than 0.1% to 2,176.85 while Dow Industrials DJIA, -0.05% fell 9 points to 18,858. The Nasdaq Composite COMP, +0.18% declined 0.1% to 5,291.48.

Shares of Nike Inc. (NYSE: NKE) were downgraded by analysts at Vetr Inc. in a note to their investors today. With a rating of Buy on the shares, Nike Inc. has a 52-week high of $68.19. A number of other analysts have commented on the company recently, and Nike Inc. has secured a consensus one-year price target of $63.05, higher than the opening price of $50.94, a difference of 12.35 percent. Downgrades happen when analysts consider that the future prospects for the security have diminished from the original recommendation, often due to a considerable and integral digression in the company’s procedures, future vision or industry.

Nike Inc. (NYSE: NKE) shares last traded at $51.04, which represents a jump of $0.36 or 0.71% from the previous closing price. Opening at $50.94, they fluctuated from $50.72 and $51.07 throughout the day.

Nike Inc. (NYSE: NKE) now has a market cap of 85.00B.

Nike Inc. (NYSE: NKE) Average Daily Trading Volume

1,102,496 shares crossed the trading desk yesterday, below normal, out of a total float 1,332,230,000. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to identify heavy volume accumulation or circulation by institutional investors.

As with all potential breakouts, investors watch for volume to be at least 40%-50% greater than normal on the breakout to indicate that fund managers and other professional investors are jumping in.

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

These instituitional investors retain substantial teams of analysts that investigate thousands of stocks, so it is good confirmation to see them taking a postion in a stock you are considering.

Nike Inc. (NYSE: NKE) 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 successful trades.

Trades for Nike Inc. (NYSE: NKE) have ranged from $49.01 – 68.19, and the stock now has a 50-day MA of $51.38 and 200-day MA of $55.00. Today’s last price is 25.16%% under the 52 week high of $68.19.

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

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