Groupon’s (GRPN) gap down on earnings has so far found support a the 50% retracement level from the 11/13/12 lows to the 9/19/13 highs.
Ideally we would normally like to see a more of an orderly decline along with some positive divergence but gaps can make that type of set-up difficult. We do currently view the pullback in GRPN’s shares as an opportunity but would only be interested in trades where there was a defined risk level. That is what we now have with the 50% Fib which held as support.
We believe trader’s can now use pullbacks for long opportunities with the 2/24/14 lows of $7.67 and the 50% fib level as their stop.