Downgrade Keeps Pressure on OLED Stock

OLED shares have breached their 100-day moving average

Sep 12, 2019 at 10:15 AM
facebook twitter linkedin


Universal Display Corporation (NASDAQ:OLED) touched an all-time high of $230.32 just last week, but the shares have already pulled back significantly since this peak. OLED stock suffered two huge daily slides in the sessions after the milestone, and today it's off another 7.7% at $178.26. This price action is a result of Susquehanna's note, which cut the equity's rating to "negative" from "neutral," and its price target to $130 from $210.

Looking closer, the brokerage firm believes cost increases could slow the penetration of OLED screens, specially in the smartphone market. In response, OLED has fallen below the 100-day moving average for the first time in seven months, a trendline that served as strong support during that last two pullbacks.

Most analysts are already bearish on Universal Display, with just two of the nine in coverage recommending to buy the shares. Options traders, on the other hand, have been bullish across the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The 10-day call/put volume ratio across these exchanges is 3.10, and ranks in the 88th annual percentile -- showing a stronger-than-normal demand for long calls.

While all of this has been happening, short sellers have been hitting the exits, as part of a multi-month exodus from these traders. In the last two reporting periods alone, short interest declined by 22.2%.

 

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners