May. 11 at 5:21 PM
$GRPN - I’ve been professionally involved with equities and capital markets for more than 30 years. I say that not to be braggadocious, but to make clear this view comes from decades of watching positioning, structure, and human behavior collide in real time.
Groupon (GRPN) is a textbook short‑squeeze setup with the potential to become something far more dynamic if it pushes through the mid‑20s. More than half the free float is sold short, with estimates in the low‑60% range and days‑to‑cover in the low double digits on average volume. That means a majority of tradable shares are effectively spoken for by shorts, and they cannot all exit quietly. Any meaningful buying pressure or fundamental catalyst can quickly force them to compete for limited supply, turning shorts themselves into the marginal buyers.
The technical backdrop is already confirming that buyers are in control. Price has recently bounced off the weighted 200‑day moving average around 15.37. The 100‑day simple moving average sits near 13.99, and the 30‑day exponential moving average around 14.39, so the stock is trading above all three key moving averages. That alignment—price above the 30‑day EMA, 100‑day SMA, and 200‑day weighted—signals a developing up‑trend supported across short‑, intermediate‑, and longer‑term time frames.
Volume and accumulation indicators reinforce this picture. The Chaikin Oscillator and on‑balance volume point to accumulation rather than distribution, implying that up‑days are being driven by real buying and that the effective days to cover may be shorter than the raw short‑interest numbers suggest. Bollinger Band width has only just begun to expand, with bandwidth only modestly positive, which typically marks the early phase of a larger move, not the exhaustion phase. The ease‑of‑movement indicator over the last seven days, around the 1.6 million level, suggests that relatively modest volume has been sufficient to move the stock higher, highlighting thin supply from willing sellers.
Taken together, these technicals give a clear roadmap. The next key break level sits around 22.83. A decisive move through that area both confirms the up‑trend and moves GRPN into the price region where its options structure becomes critical. One further leg higher from there puts the stock in the mid‑20s, roughly around 25.84, which is where the dynamic can shift from a straightforward short squeeze to a hyperbolic move.
At that point, you are no longer dealing only with crowded shorts. As price trades into the mid‑20s, it begins to challenge strikes where call open interest is concentrated. Market makers short those calls must buy stock to stay hedged as call deltas increase, creating a second, mechanical source of demand. The initial leg is driven by shorts forced to cover a roughly 63% short float; the next leg is driven by options dealers forced to buy shares to hedge rising gamma as the stock moves through those call strikes.
Below those option levels, GRPN is primarily a high‑short‑interest squeeze supported by improving technicals and accumulation. Above approximately 22.83, and especially if it pushes toward the 25.84 area, the setup can evolve into a hyperbolic move because a classic short squeeze is now amplified by a gamma squeeze: shorts and dealers are both forced buyers, competing over a limited float while price is already above all key moving averages and volatility is only beginning to expand.
