close icon

OLED Stock Bulls Living on Borrowed Time

Universal Display Corporation is engaged in the research, development and commercialization of OLED technologies, which explains why its stock symbol on the NASDAQ exchange is OLED, even though it has nothing to do with the company’s actual name. OLED stock climbed to an all-time high of $209 per share in January, 2018. Unfortunately, the rest of the year could not keep the bullish promise, which led to a 62% decline to $78.75 by late-June.

OLED stock closed at $119 a share yesterday, up over 50% from the June bottom. Is this recovery the beginning of a larger uptrend or just a bull trap investors should avoid? That is the question we hope the Elliott Wave Principle will help us find the answer to.
OLED stock Elliott wave chart
The 4-hour chart above reveals a troubling picture. It shows that the decline from $209 to $78.75 is a textbook five-wave impulse, labeled 1-2-3-4-5. Impulses point in the direction of the larger trend, which means OLED stock’s drop this year was just the first phase of a larger bear market. According to the theory, every impulse is followed by a three-wave correction in the opposite direction before the trend resumes. That is what we believe has been under construction since the bottom at $78.75 – a simple A-B-C zigzag correction.

After a 50%+ recovery it may seem the bulls are back for good, but if this count is correct, Universal Display‘s woes are far from over. Once wave (2/B) ends, probably in the area between $140 and $160, another massive decline should occur in wave (3/C) and drag OLED stock to a new low under the $70 mark. So don’t worry if you didn’t join the bulls below $100. They are living on borrowed time.

Did you like this analysis? Learn to do it yourself with our Elliott Wave Video Course!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Plus500 Confirms Uptrend, but Correction is Likely

Based in Haifa, Israel, Plus500 (LSE:PLUS) operates a leading CFD trading platform. The company is part of the FTSE 250 index and conducts most of its business in Europe and Australia. The new ESMA regulations which came in effect in August 2018 severely impacted the CFD trading industry. As a result, Plus500 stock fell from…

Read More »

Moody’s, a Buffett Darling, Trading in Late Fifth Wave

Moody’s Corp. has been a long-time holding in the Berkshire Hathaway portfolio. It is also the seventh biggest position in it as of the end of March 2020. The company has a strong competitive advantage, it is highly profitable and growing. No wonder Warren Buffett likes it so much. The stock did decline sharply in…

Read More »

Dollar General Stock Bulls are Looking for Trouble

As a general merchandise discount retailer, Dollar General was among the handful of businesses that actually benefited from the pandemic. People piled on necessities preparing for what looked like the end of the world for a while. As a result, sales at Dollar General surged in the midst of the crisis. While its stock price…

Read More »

Veeva Systems Stock Trades in Bubble Territory

It is true that the Fed’s recently re-adopted zero rate policy and stimulus are distorting financial markets. Interest rates are like gravity to financial assets. The lower the rate, the higher asset prices go and vice versa. As a result, stocks in general tend to ignore the economic reality right now. Among the companies trading…

Read More »

PNC Financial Completes Bullish Elliott Wave Cycle

Economic crises have always been especially tough on financial companies. Usually, when the general market is falling, financial stocks are crashing even harder. PNC Financial for example, lost 81.6% in the 2008-9 recession, while the S&P 500 fell by “just” 58%. PNC Financial stock suffered more than the general market during the recent coronavirus selloff,…

Read More »

Avoiding the 54% Crash in Brookfield Partners

When we last wrote about Brookfield Partners, the stock was hovering around $44 a share. That was on July 27th, 2019. Back then we though the price can reach $50, but instead of celebrating, the bulls should be getting ready to leave. The reason for our skepticism wasn’t some special insight into the company’s operations…

Read More »

Alphabet Stock To $1700 and… Below?

Similarly to the market at large, Alphabet stock felt the tremors caused by the coronavirus panic. The Google parent’s share price fell from $1531 to $1009 between February 19th and March 23rd. One of the biggest and strongest companies in the world lost 34% of its value in a little over a month. However, thanks…

Read More »

More analyses