In the short-run it looks like Groupon, Inc. (GRPN) has corrected its June to November rally and may now be in a position to rally further in the weeks ahead. The longer-term picture shows a basing pattern since the middle of 2015 and that may persist a while longer. Let's check the latest charts and indicators to see if it will pay to build a long position in the near future and how we might balance that against the longer-term outlook.
In this daily bar chart of GRPN, below, we can see that GRPN is trading below the declining 50-day moving average line. The rising 200-day line was broken in the middle of February but prices are close to closing back above the 200-day line. This daily chart shows some potential chart resistance in the $5.00 to $6.00 area.
Sellers of GRPN have been more aggressive since early December when the daily On-Balance-Volume (OBV) line turned lower. The trend-following Moving Average Convergence Divergence (MACD) oscillator declined below the zero line in late December for an outright sell signal. This indicator is now crossing to the upside from below the zero line for a cover shorts buy signal.
In this weekly bar chart of GRPN, below, we can see that prices have closed below the rising 40-week moving average line. The chart shows that the $6 level is pretty strong resistance. The weekly OBV line peaked in November and has weakened, telling us that sellers of GRPN have been more aggressive for the past four months. The MACD oscillator is in a bearish mode and could break the zero line in the weeks ahead for an outright sell signal.
In this Point and Figure chart of GRPN, below, we can see a base pattern that goes back to 2014. A trade on this chart at $6.00 will be an upside break out and yield at a price target of $9.50 for starters.
Bottom line: I feel like it is a judgment call to balance the short-term picture and the long-term picture on any company. In the short-run GRPN needs further basing action but the weekly chart looks like we want to be a patient buyer around $4.00 if available. The short and long-term views come together if GRPN can close above $6.00.