Groupon Inc (GRPN) Stock Surges As Trading Volume Soars

Groupon Inc (GRPN) Stock Surges As Trading Volume Soars
By GrouponRUS (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Today Groupon Inc (NASDAQ:GRPN) may be the hot stock of the day though, as already nearly 21 million shares have changed hands. The stock’s average daily volume is only 14.42 million shares. The company continues to benefit from Monday’s positive report from Piper Jaffray analyst Gene Munster. When Munster talks, people listen, and when he speaks positively about a company like Groupon, people take it as gospel.

Is Groupon finally coming back?

Groupon Inc (NASDAQ:GRPN) hasn’t come close to its all-time high of nearly $30 a share in the wake of its November 2011 initial public offering. In fact, the stock has been under $3 a share at one point, but it seems as if investors are starting to become convinced that the company’s turnaround plan is actually working.

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Shares of Groupon Inc (NASDAQ:GRPN) rebounded after the company’s prospects improved, its business model changed, and it ousted founder Andrew Mason as CEO. The stock neared $13 last fall, but shares lagged after the company reported worse-than-expected losses. As of this writing, the stock had passed $7 a share. Nonetheless, Groupon stock remains down by 45% so far this year, so it’s got a ways to go.

Groupon a “barbarian”?

Writing on The Street, David Aferiat said Trade-Ideas LLC is calling Groupon Inc (NASDAQ:GRPN) a “barbarian at the gate.” He defines that term as “strong stocks crossing above resistance with today’s range greater than 200%.” The firm named a number of proprietary factors and some other factors.

Trade-Ideas noted that Groupon Inc (NASDAQ:GRPN)’s average dollar volume is $101 million and that it has traded in a range of 220% of “the normal price range with a price range of” 51 cents. In addition, the company traded higher than its daily resistance level. The firm said it has a quality of 49 days, which means that shares have passed the resistance level set by the last 49 calendar days. Trade-Ideas defines the resistance price as the price minus 1 cent at the “time of the signal.”

The firm said its so-called “barbarian at the gate” stocks are worth paying attention to because of volatility and “historical back testing.” The firm said it targets these stocks because they exhibit “an unusual behavior while displaying positive price action.”

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