I have never used Groupon, Inc. (GRPN) , but I did check out the charts back in early March, noting that "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."
Looking back at the price action of the past two months, including yesterday's strong intra-day rally, shifts the narrative. Let's spend some time with GRPN this morning.
In this daily bar chart of GRPN, below, we can see that prices show a two-month pattern of higher lows and higher highs or the simple definition of an uptrend. GRPN is back above the flat to slightly rising 50-day moving average line and the rising 200-day line.
Wednesday's price action shows an early strong move higher and then a slow drift back down (intra-day chart not shown). This kind of move suggests that a sustained move up will have to wait a little longer as some traders used the strong opening to take profits.
The daily On-Balance-Volume (OBV) is mostly flat/neutral the past two months. A stronger OBV line would be more supportive of the bull case.
The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in the middle of April for a go long signal on this time frame.
In this weekly bar chart of GRPN, below, we can again see a developing base pattern. Again a close above $6.00 is really needed to complete the base and give us an upside breakout. Prices are now above the rising 40-week moving average line.
Unlike the daily OBV line, the weekly OBV line shows improvement the past two months.
The weekly MACD oscillator is close to an upside crossover and cover shorts signal. Stronger prices in the weeks ahead could push this indicator above the zero line for an outright go long signal.
In this Point and Figure chart of GRPN, below, we can see the slowly forming base pattern. This chart needs a trade at $6.00 for a triple top breakout opening the way to a possible $9.75 price target.
Bottom line: I am not any closer to actually using Groupon but I am closer to recommending the long side. Aggressive traders who can risk a close below $4.50 can probe the long side. Conservative traders and investors should wait for a breakout over $6.00.