After Today’s Gap Down, Is Smith & Wesson Holding Corp’s Near-Term Analysis Negative?

The stock of Smith & Wesson Holding Corp (NASDAQ:SWHC) gapped down by $0.12 today and has $25.22 target or 5.00% below today’s $26.55 share price. The 5 months technical chart setup indicates high risk for the $1.45 billion company. The gap down was reported on Mar, 25 by If the $25.22 price target is reached, the company will be worth $72.50 million 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 is up 0.11% or $0.03 after the news, hitting $26.55 per share. About 5.35M shares traded hands or 117.48% up from the average. Smith & Wesson Holding Corp (NASDAQ:SWHC) has risen 70.98% since August 18, 2015 and is uptrending. It has outperformed by 73.85% the S&P500.

Out of 8 analysts covering Smith & Wesson Holding Corp (NASDAQ:SWHC), 7 rate it “Buy”, 0 “Sell”, while 1 “Hold”. This means 88% are positive. Smith & Wesson Holding Corp was the topic in 13 analyst reports since July 24, 2015 according to StockzIntelligence Inc.

According to Zacks Investment Research, “Smith & Wesson Holding Corporation is one of the world’s leading producers of quality handguns, law enforcement products and firearm safety and security products. Law enforcement personnel, military personnel, target shooters, hunters, collectors and firearms enthusiasts throughout the world have used the company’s products with confidence for 150 years. Smith & Wesson Corp. also manufactures and markets Smith & Wesson branded handcuffs and other products utilizing its metal working expertise and providing products and services to many external customers.”

The institutional sentiment increased to 1.34 in Q3 2015. Its up 0.24, from 1.1 in 2015Q2. The ratio increased, as 22 funds sold all Smith & Wesson Holding Corp shares owned while 52 reduced positions. 46 funds bought stakes while 53 increased positions. They now own 38.66 million shares or 6.17% less from 41.20 million shares in 2015Q2.

Royal Capital Management Llc holds 5.66% of its portfolio in Smith & Wesson Holding Corp for 125,000 shares. Eubel Brady & Suttman Asset Management Inc owns 594,998 shares or 3.41% of their US portfolio. Moreover, Hood River Capital Management Llc has 1.48% invested in the company for 634,327 shares. The Louisiana-based Price Capital Management Inc. has invested 0.98% in the stock. Park West Asset Management Llc, a California-based fund reported 561,253 shares.

Since March 17, 2015, the stock had 0 insider purchases, and 2 insider sales for $377,522 net activity. Cicero Robert J. sold 17,710 shares worth $312,922. Scott Robert L sold 3,800 shares worth $64,600. Golden Michael F sold 12,534 shares worth $217,174. Buchanan Jeffrey D sold 12,021 shares worth $223,023. The insider Monheit Barry M sold 20,000 shares worth $370,000.

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