GRPN closes above its opening price after recovering from early selling pressure
Groupon Inc. (GRPN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GRPN finished the week 14.68% higher at 1.25 after flat today, slightly underperforming the S&P 500 (0.24%) ahead of Tuesday's earnings report. Trading up to $0.04 lower after the open, Groupon managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GRPN as at May 22, 2020):
GRPN is set to report earnings on Tuesday. For the upcoming report, analysts expect the company to have earned $-0.07 per share. The company's last earnings report was released on Feb. 18, 2020, when Groupon Inc. reported earnings of $0.07 per share failing market expectations by -58.8%.
Friday's trading range has been $0.05 (4.03%), that's far below the last trading month's daily average range of $0.10. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GRPN. Prices continued to consolidate within a tight trading range between 1.20 and 1.30 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on March 25th, GRPN actually gained 14.61% on the following trading day.
After having been unable to move lower than 1.20 in the prior session, the stock found buyers again around the same price level today at 1.20.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 1.30 where further buy stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Groupon. Out of 512 times, GRPN closed lower 54.69% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.69% with an average market move of -0.75%.