Is LG Display (LPL) in Trouble?

LG Display (LPL) is a South Korea-based company that is principally engaged in developing, manufacturing and selling TFT-LCD and OLED display panels. The company’s products consist of panels for notebook computers, monitors, televisions, smartphones, tablets, and others…

In the most recent quarter, LG Display’s (LPL) revenue hit an all-time high due to strong sales in TV displays including OLED. Also supporting sales was solid performance in IT products and an increase in LCD panel prices.

The company has a current ratio over 1, which indicates it has more than enough liquidity to handle short-term obligations. In terms of growth, analysts forecast revenues to rise 24.1% year over year in the current quarter and 29.9% for the year.

LPL’s stock looks undervalued with a forward P/E of just 7.45. The stock had been trending up since March, but has shown mixed momentum this year as shown in the chart below.

Take a look at the 1-year chart of LPL below with the added notations:

 

Chart of LPL provided by TradingView

Starting at the beginning of the year, LPL formed a major level of support at the $9.50 (green) mark. That line also became the “neckline” for the stock’s head and shoulders (H&S) reversal pattern.

Confirmation of the H&S occurred when LPL broke the support, and lower prices are now expected from there. Short trades could be entered at current levels, or on rallies back up to the $9.50 level, with a stop set above the point of entry.

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