Groupon (GRPN) may have some appealing offers, but the charts do not reflect a great bargain.
Prices have been up and down the past 12 months but sustained accumulation has just not appeared even at low prices.
Let's examine things a bit closer.
In this one-year daily chart of GRPN, above, we can see some big percentage swings up and down. Prices do not have a durable uptrend as the strength only lasts one or two months. The retracements last much longer and really define the weak state of GRPN. Prices are below the declining 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line moves in a very jerky fashion and does not suggest accumulation or sustained aggressive buying. The momentum study shows a November/December bullish divergence but it has not translated into any meaningful upside price action.
This weekly chart of GRPN, above, does not conflict with the daily chart. Prices are below the declining 40-week moving average line. The weekly OBV line has shown only limited strength the past year. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish configuration below the zero line.
Bottom line: GRPN could continue to trade sideways, but a test of nearby support in the $3.25 to $3 area would not surprise me.