Let’s look at a stock that’s close to coming out of a squeeze. (October 11, 2012)
GRPN
I’m Dan Fitzpatrick at StockMarketMentor and OptionMarketMentor.com on Thursday, October 11, 2012, 10/11/12. A real quick one on Groupon ( $GRPN Groupon Inc ). The thing that I like about this chart right here is the volatility squeeze. You can see it really kind of popped out back here, volume was a little bit low then a couple days later it was higher, closed higher. Since that time it’s really been consolidating within this trading range. Well now it looks like it’s poised to break out even more, so this is a pretty easy one actually. When the stock starts moving above $5.50 or so, assuming this is the low as opposed to when it pulls back, but for now we’re going to assume that $5.00 is support; so it’s right in between at $5.25, it’s right in between support and where I would say resistance is at $5.50. So here’s what you want to do, if you want to go ahead and start taking some stock right now, fine, you can do that; and then if the stock starts moving to the upside further then you go ahead and take some more because you can see, I mean this thing has been discounted a lot. I remain of the mind that the business model actually doesn’t work; but does that really matter in this chart? If the stock pops up to $6.00, $6.50, $7.00 or something like that, that’s a pretty nice return on a $5.25 purchase. That’s all I have to say about that. Members, Strategy Session, we’re going to look at the stuff that’s not working and you want to avoid that, probably some good shorting opportunities there too. Free Chart