Apple Supplier Gears Up for Earnings

Short interest on Universal Display has seen a rapid drop

Managing Editor
Feb 19, 2020 at 2:32 PM
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Apple (AAPL) supplier Universal Display Corporation (NASDAQ:OLED) is enjoying a modest 0.3% lift this afternoon, last seen at $178.31 as Wall Street gears up for the company's fourth-quarter report. Slated for after the close tomorrow, Feb. 20, below we will dive into what the options market is pricing in the for the stock's post-earnings moves, and see how the equity has been faring on the charts.

From a technical viewpoint, OLED has been stuck in a series of higher lows since mid-2019. The stock recently dropped below the 200-day trendline after a run of support in October, but is now holding steady at the $170 floor. The screen maker was back near record-high territory just last month, but stalled out near the $222 mark, and gapped lower shortly thereafter. 

Daily OLED with 200MA

Looking at OLED's earnings history, the stock has closed higher the day after reporting in five of the past eight quarters, including a 15.3% in October. During the past two years, the equity posted an average 13.9% next-day swing, regardless of direction -- slightly smaller than the option's current-quarter estimated post-earnings move of 15.6%.

Short interest on OLED has dropped 14.8% during the most recent reporting period, and now accounts for 2.4% of the stock's total available float. At Universal Display stock's average pace of daily trading, it would take short sellers just over two days to buy back their bearish bets. 

 

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