Universal Display Stock Burns Skeptics with Another Record High

Universal Display could be enjoying CES-related tailwinds

by Josh Selway

Published on Jan 8, 2018 at 3:29 PM

Universal Display Corporation (NASDAQ:OLED) had a huge year in 2017 and that momentum is carrying over to the new year, with the shares adding 8.7% today to trade at $194.90, earlier tapping a record high of $196.90. This move comes after Susquehanna earlier lifted its price target to $215 from $195. OLED stock could also be feeling tailwinds from CES, where a number of new products have featured OLED technology.

Meanwhile, call volume is exploding, with more than 9,300 of the options trading so far -- three times the daily average. The most popular calls are the January 2018 190, 195, and 200 strikes, and for those buying to open positions the goal is for OLED shares to continue their ascent on the charts before the contracts expire on Friday, Jan. 19.

Call buying is nothing new on Universal Display. During the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the number of long calls initiated has essentially doubled the number of long puts. And based on the equity's Schaeffer's Volatility Scorecard (SVS) of 87, it's regularly exceeded volatility expectations over the past year.

A number of short sellers got out of dodge in time for the security's most recent surge, since short interest fell by 22.8% in the last two reporting periods. But short interest on OLED still represents 7.5% of its float, so it would seem there's room for more short covering -- which could result in more upside for the shares.

It's also interesting to note that the majority of covering analysts maintain just "hold" ratings on Universal Display, and the stock is trading well above its average 12-month price target of $185. All this despite the fact the security is up about 239% over the past year.

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