Here’s Our Plan for One Holding Flirting With Its Panic Point
With the shares close to their $165 panic point, here's our strategy.
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Since reporting its September-quarter results, shares of Universal Display OLED have fallen 17%, which with a relative strength index (RSI) of 28.68 has them in oversold territory. We’d note that the move lower comes despite the recent December-quarter guidance from Qualcomm QCOM and Skyworks Solutions SWKS calling for mid-single-digit smartphone growth.
When Universal issued its guidance for the current quarter, we discussed why its revised outlook for the current quarter could be overly conservative. That incorporates Samsung’s smartphone outlook for the current quarter and to that, we can add not only the outlooks from Qualcomm and Skyworks but also Taiwan Semiconductor's TSM October revenue report.
In our view, all the above points to a risk-to-reward tradeoff that skews favorably for OLED shares. Looking at the chart above, setups similar to this have been a nice pickup point for OLED shares. This time around, however, we do have Fed Chair Powell coming up later this afternoon, and should his comments disrupt the market, we could see OLED shares trade lower.
As we prepare our next move with OLED shares, the first step is to get past Powell’s comments.
