Five Star Stock Watch: Groupon, Inc.

The company: Groupon, Inc.

Ticker Symbol: GRPN

Sector: Technology   

Industry: Internet Information Providers

Groupon, Inc. operates as a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. The company also offers deals on products for which it acts as the merchant of record. It offers deals in various categories, including food and drink, events and activities, beauty and spa, fitness, health, home and auto, shopping and education. 

Related: Five Star Stock Watch: Apple

The company emails its subscribers discounted offers on goods, services and travel targeted by location, purchase history and personal preferences. It also enables its customers to access its deals directly through its website and mobile applications. 

Please take a look at the 1-year chart of Groupon below with my added notations:

Over the last 12 months Groupon has consistently moved higher, although it has been pulling back since September. During its uptrend that stock has formed a key trendline of support. Always remember that any two (2) points can start a trendline, but it’s the third test and beyond that confirm its importance. Groupon's trendline seems to be important since it has been tested on 3 different occasions. 

Related: Five Star Stock Watch: Facebook

Groupon's trendline should be monitored by both long term investors and short-term traders for potential buying and selling opportunities. Groupon isn't set to release earnings again until 2014.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!