Unit Corp. (UNT) shares fall following downgrade at KLR Group

Unit Corp. (NYSE: UNT) shares rose on Monday Nov 21 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 were set to open higher this morning. The Dow Jones Industrial Average futures YMZ6, +0.20% was 10 points, or less than 0.1%, higher at 18,863, while S&P 500 index futures ESZ6, +0.44% rose 3.95 points, or 0.2%, at 2,184.75. Nasdaq-100 NQZ6, +0.74% added 12.25 points, or 0.2%, to 4,820.75.

Analysts at KLR Group downgraded shares of Unit Corp. (NYSE: UNT) from Accumulate to Hold in a research note to investors today. The company currently has a rating of Hold on the shares. The one-year price target of $21.44 is above the opening price of $21.21, that has caused a fair amount of other analysts to issue statements on the stock recently. Looking back over the last 52 weeks, Unit Corp. stock has a high of $21.81. Downgrades are more common when analysts consider that the future prospects for the security have diminished from the initial recommendation, usually due to a material and major change in the company’s procedures, future direction or industry.

Shares of Unit Corp. (NYSE: UNT) opened at $21.21 on Monday and traded in a range between, $21.20 and $21.81, and last traded at $21.38, which represents a jump of $0.34 or 1.62% compared to the previous closing price.

Unit Corp. (NYSE: UNT) currently has a market cap of 1.10B.

Unit Corp. (NYSE: UNT) Average Daily Trading Volume

86,898 shares crossed the trading desk yesterday, lower than the norm, out of a total float 49,984,000. Trading volume is likely to increase in the next few days as momentum traders often use swings in trading volume to determine heavy volume aggregation or distribution by institutional investors.

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

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

Institutional investors such as these retain 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.

Unit Corp. (NYSE: UNT) 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 marking the activity of these professional investors—and the moving averages they affect— traders can make well planned trades.

With that in mind, Unit Corp. (NYSE: UNT) now has a 50-day MA of $18.55 and 200-day MA of $15.92. It has traded in a 52-week range between $3.90 – 21.81 and today’s last price is 1.97%% lower than the 52 week high of $21.81.

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

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