GRPN closes below its opening price unable to hold early session gains
Groupon Inc. (GRPN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, GRPN finished Wednesday at 27.02 losing $0.51 (-1.85%), notably underperforming the S&P 500 (-0.46%). Today's close at 27.02 marks the lowest recorded closing price since August 17th. Trading $0.41 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (GRPN as at Sep 16, 2020):
Wednesday's trading range has been $1.00 (3.64%), that's far below the last trading month's daily average range of $2.46. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GRPN.
Unable to break through the key technical resistance level at 27.79 (R1), the stock closed below it after spiking up to 27.88 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 27.02 in the previous session, Groupon found buyers again around the same price level today at 26.88. The last time this happened on September 9th, GRPN actually lost -3.57% on the following trading day.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Groupon. Out of 376 times, GRPN closed lower 60.64% 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 57.18% with an average market move of -0.94%.