Universal Display Corporation (OLED) Stock Chart Review

A member request came through to look at the charts for Universal Display Corporation (OLED). The link will take you to the company website where you can learn more about their products and source of revenue.

But this article will not be about revenue. As I prefer, this article will look at a couple different charts to if there is accumulation or distribution of shares going on right now. As applicable I will then identify either the upcoming support or resistance area for its share price.

Time to dive into the charts!

20 Year Long-Term Chart Review

This first chart is a 20 year monthly candlestick chart. When analyzing a new company I typically like to start with a 20 year chart first. I always try to find the largest Bullish Impulse wave pattern that I can on the chart to see what the company’s longest price uptrend was for its share price. Elliott wave analysis is one of my investing keys to success.

Why do I try to identify the largest Bullish Impulse wave pattern that I can? I want to see if the wave pattern could be part of an even larger Bullish Impulse wave pattern that is developing. Initially, that does not appear to be the case for OLED’s share price. After a stock’s share price drops below the top of Wave 3, the chances for

I’ve indented the Bullish Impulse wave pattern on the chart with trendlines and my labeling of waves 1-5. Statistically speaking, the highest percentage pullback area to correct a Bullish Impulse wave pattern is the top of Wave 1. The top of Wave 1 is at $74.39 which means that OLED’s share price will most likely see a lot of support around the $75 price level. Yes, that means I think its going even lower.

The amount of selling volume during the pullback that started in February 2018 has been way above average. That tells me to look at the pullback in more detail and look for alternatives to the $75 price level as a pullback. I will do that later in the article on a 1 year daily candlestick chart for Universal Display Corporation (OLED).[s2If !current_user_can(access_s2member_level1)]……

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I review 2 widely different support areas and the signs of a reversal to watch for during OLED’s current pullback. Purchasing shares at a support area is a sound strategy for the hard-earned dollars in your portfolio.

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I forgot to include the MACD Histogram on the above chart. It currently shows increasing selling momentum, a bearish sign.

And the last item I want to point out on this chart. Notice the green volume spike in the gray shaded box for May 2018? The first sign of buying usually helps to signal that the downtrend is close to over.

3 Year Weekly Chart

Next, let’s take a peek at a 3 year weekly chart for Universal Display Corporation (OLED). The green trendlines identify 3 previous consolidation areas. Previous consolidation areas are always considered a support area.

The MACD Histogram on this weekly chart is almost creating a bullish divergence. This should help OLED’s share price find support at the upper support area.

If selling volume keeps the trend of increasing again next week though, patience is required. With increasing selling volume there is a chance for a breakdown of the $75 – $80 support area. If that happens and the MACD Histogram continues to show decreasing selling momentum or even buying momentum that is increasing, then make an initial scale-in purchase to go long.

Let’s review this possible trade set-up on a more detailed daily candlestick chart.

OLED’s Bearish Impulse Wave Pattern

On this 1 year daily candlestick chart I illustrated a Bearish Impulse wave pattern. Based on my illustration, Wave 4 of the pattern appears to have completed and Wave 5 is now under development.

I placed 2 different Fibonacci Extension Tools on this chart to calculate possible reversal areas for OLED’s share price. OLED’s share price has spent a lot of time around the 100% Target Line from the first Fibonacci Extension Tool I placed on the chart.

The second Fibonacci Extension Tool I placed on the chart was shorter-term in nature. I placed it in the Wave 5 area to help calculate a Wave 5 bottom. I was also looking for possible confluence areas from the 2 different Fibonacci Extension Tools. The gray shaded box represents where I think Wave 5 will end. However, if OLED’s share price does not find support and reverse in the $75 – $84 range, the $50 area becomes a distinct possibility.

Now let’s look at the MACD Histogram. It is just starting to show selling momentum. This is bearish. This also seems to confirm that Wave 5 is under development. Look for selling momentum to pick up steam in the upcoming week.

Wave 5 should end in a day of capitulation, or really high volume. At a minimum, I would expect OLED’s volume to exceed the 4 million shares traded mark and probably be closer to the 8 million mark.

Universal Display Corporation (OLED)  Summary

With the long-term MACD Histogram still showing increasing selling momentum, the best strategy for OLED right now is patience. A key area to watch for OLED’s share price is the $75 price level. If it can maintain that level and start to rebound, it may warrant an initial scale-in purchase to go long.

If however the $75 price support level breaks on heavy selling volume, the $50 price level becomes a distinct probability.

After a stock enters into a prolonged pullback, remember to look for the capitulation day at the bottom of the downtrend. For Universal Display Corporation (OLED), that is at least 4 million daily traded shares up to 8 million shares. Wave 5 should end with a BANG!

If you think you may see signs of a reversal around the $75 price area but are unsure, stop by the Idea Chamber and ask for an update!

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