Groupon (GRPN) announces earnings tomorrow. Here’s the trade.

I want to look real quick at Groupon ( NASDAQ:GRPN ). This is actually pretty easy. The company announces earnings tomorrow, so we just need to look at a couple levels here; the 200-day moving average is a big level, right now that is at $9.68, it doesn’t have to be exact, but you can see this level. So if they happen to miss earnings, if the stock gaps down a bit, and then bounces off of that, that’s one that you have to buy, because the last time it hit it, that’s what it did. So if it bounces off of the 200-day moving average that’s one that you’ve got to buy.

Now, if it falls through the 200-day moving average, gets even worse; now you have to look at this, you’ve got to look at this level here, this is resistance, which is actually not that much above the 200-day moving average. So if the stock gaps down and then starts trading up, just know that right about here, you’re going to get a whole bunch of supply. Whether the stock rolls over or whether it moves higher is not for me to say right now, but just know that this is a critical level, that’s the thing; the $10.00 level is a critical level, if the stocks trying to come up from above.

Now, on the other hand, if the company announces solid earnings, the stock gaps up here, then this is one that you’ve also got to buy, because I think the stock will just keep going. So I hope that helps on Groupon ( NASDAQ:GRPN ); just watch and see how this trades at the open, the first move is usually reversed.