Universal Display Corporation (NASDAQ: OLED)

Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel displays and solid-state lighting applications.

Take a look at the 1-year chart of Universal (NASDAQ: OLED) below with the added notations:

1-year chart of Universal (NASDAQ: OLED)

OLED fell rapidly starting in January and continued lower into the summer. The stock has been in rally mode for the past 2 months, and now it is back above its key level of $120 (blue). The $120 level has commonly provided both support and resistance to OLED.

The Tale of the Tape: OLED has a key level at $120. Traders could enter a long position on a test of $120, with a stop placed below the level. However, traders that are bearish on the stock might have an opportunity to get short if OLED were to break back below $120 again.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT