Boston, MA 09/26/2014 (wallstreetpr) – Groupon Inc (NASDAQ:GRPN) (Closed: 6.58, Down: 1.50%) had another down day on the volume of 15.5 million against the average volume of exactly the same figure. In the first week the current month, it had hit a high at $7.28 followed by a sharp correction. A secondary high came at $7.23 in the second week and since then, the stock has suffered for eight sessions in the last ten sessions, though no lower low has been registered yet. The news of the CAO of the company selling shares at the rate of $6.92 is not really helping the stock to reverse its downtrend in any discernible way. But for a stock that is trading 47% lower than the 52-week high when the broader market is in a roaring bull market, an immense event would be required to really turn the trend around.
The stock was listed in end 2011 and hence, saved from the turmoil of 2008 but it started dropping from the very month of its listing. From the high of $31.14, it fell to $2.60 by early 2012 to form a bottom. The subsequent bounce could manage only about a 35% retracement of the entire fall and made a high at $12.76. Within a few months, a Double Top was formed and in February 2014, the pattern was activated with the minimum target of $4.40. The low till now is made at $5.18 and the rest of the fall is still pending.
From the weekly charts, a clear supply zone can be seen in the band of $7.50-$8.50 and the stock must clear this hurdle to reverse the long term trend. In the short term, the price is contracting with support coming up at $6.00-5.90 levels.
Investors may stay away from the stock, which is more suitable for the traders who can play the range by selling near $7.50 and buying near $6 levels.
