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Charts of the Week: Groupon Takes a Dive

Written By Brian Hicks

Posted January 4, 2012

Just as we expected, shares of Groupon (GRPN) are getting slammed after refilling the bearish gap down mid-November.

But what’d you expect from a social networking stock?

We’ve seen this show before.

groupon chart 010412

Near-Term Future of the Dow…

As I was telling options readers yesterday, yesterday’s 200+ point rally would be short-lived. We’re over-extended on the upper Bollinger Band with an overbought read on W%R. Look for a pullback shortly before buying calls for possible further upside.

That was yesterday. Today, the Dow is beginning its pullback.

Wal-Mart Slams into Overhead Resistance

We’re also watching Wal-Mart (WMT) as it slams head first into overhead, historical resistance. We believe the stock could snap back on failure to reach a new high. Here’s what we’re looking at.

wal-mart chart 010412

Acme Packet… Slaughtered at Open

Look for further downside in shares of Acme Packet (APKT) after it hit a new 52-week low.

The company just cut its Q4 outlook yesterday, and is down more than 20% today. More than 33,000 options traded hands today. A majority of that was put buying.

acme packet stock 010412

The company now expects EPS of 26 to 28 cents a share, as compared to consensus estimates of 37 cents. For the full year, the company sees revenue of $308 to $310 million, as compared to an earlier forecast of $315 to $320 million.

The stock may be worth picking up here after the stock plummeted 70% from April 2011 highs. Catching a falling knife is never a good idea, but the bad news may be baked in at this point.

Find out how we’re trading stocks like these right here.