Universal Display Corp. (OLED) was reviewed back in February when I wrote that "With bearish divergences and sell signals I do not anticipate that OLED will find support around $130 or even $120 and a deeper decline is possible." OLED continued to trade lower and lower until it reached $80 at the end of June. Since early July the chart has improved so a fresh look at OLED is in order.
In this updated daily bar chart of OLED, below, we can see a small base pattern in the $100-$80 area from April to August. Prices are now above the rising 50-day moving average line and a test of the declining 200-day moving average could come soon. The daily On-Balance-Volume (OBV) line has been creeping higher from late June and tells us of a shift from aggressive selling to aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration above the zero line.
In this weekly bar chart of OLED, below, we can see new strength. Prices are still below the declining 40-week moving average line but a test of the line is probably likely in the near future. The weekly OBV line has turned up and the MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this Point and Figure chart of OLED, below, we can see that prices reached a price target but the program should be generating a higher price target with the breakout over $116.
Bottom line strategy: Traders should look for a pullback closer to $110 to start to probe the long side. Risk below $95.
