Open Table is Still Dying

• Posted by Greg Harmon
• on November 21st, 2011

Whether it is that restaurants are not getting any real benefit, the advertising model for internet sales is broken or overloaded, or that people have realized it is not that big a deal to call a restaurant yourself, the stock of OpenTable, $OPEN, continues its free fall now down over 70% from its peak. Where and when will it stop? Lets take a deep dive look.

OpenTable, $OPEN – Monthly

There is not a lot of price history for OpenTable, but it is easy to spot the two major trends. First rising from 25 up to 120 over 14 months and now falling back to the 35 area over 7 months. A Fibonacci analysis shows that it is already retraced back beyond the 61.8% level and in fact the 76.4% level at 73.28. The Fibonacci Arcs have not provided any support or stall to date. With the Relative Strength Index (RSI) continuing to trend lower and now near 40 this time frame has as its next target support at 25 but then a full retracement to 20. Zooming in to the weekly chart below

OpenTable, $OPEN – Weekly

paints an equally dismal picture. It has been stair stepping down with a stop at each Fibonacci retracement along the way. The RSI on this time frame is also pointing lower as it rides along the technically oversold line but without making an extreme move lower. The Moving Average Convergence Divergence (MACD) indicator Is negative and was trying to improve but is now stalling. Both support more downside. The next support on this timeframe shows up at about 28 in the lower left portion of the chart and there is a Measured move comparing to the last leg down from 65 to 45 that would take it to 30 this time. Finally coming in to the daily chart shows the true ugliness in all of its glory. The RSI continues to bounce along the 30 level while the MACD

OpenTable, $OPEN – Daily

fluctuates near the zero line. But the downward price channel is very clearly defined. With the last support broken at 36 it now has support at the gap lower at 28.10. These charts tell of only one direction. The only problem I can see is that if you are trying to short it I cannot for the life of me see how anybody would be willing to buy it from you. Sure it is down 70% already but it looks like it still has a long way to go.

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