The stock of Ericsson (ADR) (NASDAQ:ERIC) gapped down by $0.01 today and has $8.50 target or 5.00% below today’s $8.95 share price. The 7 months technical chart setup indicates high risk for the $30.51 billion company. The gap down was reported on Dec, 12 by Barchart.com. If the $8.50 price target is reached, the company will be worth $1.53B less.
Gaps down are helpful for identifying a resistance level and to could also be used as a tradeable event. If traders are short the stock and it experiece gap down, then its usually advisable to hold the short for a bigger down move. Back-tests of such patterns show that two-thirds of the these patterns the stock performance worsens after the gap. The area gaps close 91% of the time, the breakaway gaps 1%, the continuation gaps 9% and the exhaustion gaps 64%. The stock decreased 1.92% or $0.18 on December 11, hitting $8.95. About 5.15M shares traded hands or 40.71% up from the average. Ericsson (ADR) (NASDAQ:ERIC) has declined 20.94% since May 11, 2015 and is downtrending. It has underperformed by 16.52% the S&P500.
Out of 9 analysts covering Ericsson (NASDAQ:ERIC), 6 rate it “Buy”, 0 “Sell”, while 6 “Hold”. This means 50% are positive. Ericsson was the topic in 9 analyst reports since August 5, 2015 according to StockzIntelligence Inc.
According to Zacks Investment Research, “Ericsson is a world-leading supplier in the fast-growing and dynamic telecommunications and data communications industry, offering advanced communications solutions for mobile and fixed networks, as well as consumer products. The company is a total solutions supplier for all customer segments: network operators and service providers, enterprises and consumers. The company has the world’s largest customer base in the telecommunications field.” Get a free copy of the Zacks research report on Ericsson (ADR) (ERIC).
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