Understanding Technical Signals From Groupon, Inc. (GRPN)

Groupon, Inc. (NASDAQ:GRPN) fell by -3.31% in Thursday’s trading session from $4.83 to $4.67 and has now fallen 4 consecutive sessions. The price has fallen in 7 of the last 10 days and is down by -6.6% over the same course of time. There was a decrease in both volume and price. This is usually interpreted as a good sign as traders widely believe falling stock should see declining volume. Traded activity experienced a fall of -0.09 million shares and in total 9.35 M shares exchanged hands for about $43.64 million.

Inside GRPN’s Recent Trend

Groupon, Inc. (GRPN) is at the bottom end of a wide and vertical trend in a short period of time, and this is generally seen as a very good entry point. A break down through the resistance trend line at $4.65 will initially suggest a lower tendency for gains in the price and this might very well be an early sign that a trend shift is coming. Short-term traders are predicted to see a rally of 32.08% over the course of a quarter and, with 90% chance the price will be floating in the range of $6.14 and $7.16 in this timeframe.

Groupon, Inc. Technical Signals

GRPN has witnessed its short term MA triggering a sell signal. Meanwhile, however, the long-term average has generated a buy signal. When the short-run moving average rises above its longer-term trend, a buy signal is created. This is because a short-run moving average that crosses its long-run moving average counterpart is seen as the initiation of an upward trend. On additional rally, the share price will meet short term resistance at around $4.99. On a drop, the stock is likely to find some support over the long run, which begins at $4.60. A buy signal will be generated if it crosses above the short term moving average. Meanwhile, however, a price crossing below the long term moving average will generate a sell signal. Some other technical concerns emerged as well, putting in risk the future growth of the stock in the next couple of days. Its pivot point high generated sell signal on Tuesday October 03, 2017, which calls for additional declines until the stock forms a new pivot point low, as this could be a buying opportunity. The downbeat movement of both volume and price during the recent session is interpreted as a good sign because traders usually believe falling stock should see declining volume.

Groupon, Inc. (NASDAQ:GRPN) Support And Resistance Levels

In case of pullback, the next support the price will capture from accumulated volume will not be far away from current price at $4.41 and $4.23. In case of gains, the next resistance from accumulated volume will not be far away from today’s level at $4.83, $4.91 and $5.20.

It is important to note, however, that the stock needs to make its way through natural risk while testing a key support level. Once this support is broken, another support level will be to be established at a lower level. Turning back to this stock, Groupon approaches the first support point just current price at $4.41. In case of a break, the next support we will see from accumulated volume is going to be at $4.23 and $3.99. Accumulated volume is going to prevent the price from rising further at $4.83 and this action will lead the price to take a temporary pause or stay muted for a few days.

Groupon, Inc. (GRPN) Risk Assessment

A volatility based measure Bollinger Bands suggests this stock poses high risk. In the most recent session, the stock price hovered around $0.17 between high and low, or 3.65%. The average volatility for the past week stood at 3.21%.

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