Groupon Stock struggles above $4, a sign for other Daily Deals Sites?

Shares of Groupon, the most famous daily deals website, are trading at $4.50 the past two months. Groupon stock has failed to breach the resistance level at $5.50 twice and is dangerously approaching the all-time low of $4 since Groupon IPO a year ago. It seems that Groupon’s brand engagement, the attachment between a brand or company and the customer, hasn’t been converted into… investors’ engagement, as investors who bought Groupon stock for up to $30 a share have probably taken their money off this trade, judging by the 85% GRPN stock decline!

Meanwhile, Andrea Kramer of Schaeffer’s options center discussed about Groupon options trading a week ago and noticed some optimistic signs, like the employment of more-traditional measures by option traders to place neutral-to-bullish bets on Groupon. Yet, she also pointed out that only 5 analyst ratings define GRPN stock as “buy”, compared to 17 “hold” or worse suggestions.

Most analysts expect the Groupon stock price to trade north of $4. I am not that optimistic, given the confirmation of the resistance level at $5.50 and the downtrend that has lasted 12 months. MACD divergence and oversold conditions indicated by the RSI might be positive signs for the daily deal site, but at the same time there is a lot of negativity circulating the internet, like the CreditScore.net infographic of the imminent death of daily deals sites. Did you know for example, that one in 3 daily deals sites has failed and even Facebook killed off their Deals? Or that 7 in 10 small businesses surveyed said that they “hate” Groupon? Perhaps paying four dollars for a Groupon stock shouldn’t be considered such a bargain after all!