$OLED, Universal Display Corp.

Trade Date: 2/24/17 - 2/27/17 

           After the market closed on Thursday February 23, $OLED, Universal Display Corp., revealed a fourth quarter revenue gain of $74.6 million and an EPS gain of $0.55, a boost of 20% compared to its previous 4th quarter. Universal Display saw global proliferation of OLED displays and so awards its first dividend payment of $0.03 per share to its shareholders... I want one now. I entered for both my Day Trade and Short Term Swing Trade accounts.

Trading Style: Day Trade

Trading Style: Short Term Swing Trade

Position Bias: Bullish

Technical Criteria:

  • Price Change: $ +6.80 and +10.09%
  • Premarket Volume: 12,543 shares
  • Daily Average Volume: 1.30 million shares
  • Average True Range: $2.25

Entry Price & Time – Day Trade

            $OLED's performance metrics made it an extremely attractive choice for a trade. Historically, $OLED had a previous resistance point at $74.39, from August 1, 2016. Today, the stock opened at $74.00 so there was a chance that it would drop right off the bat. Only if this stock pierced $74.39 was I willing to enter it for a long trade. Within the first minute, $OLED shot up to $74.75, at which point I looked for a setup to enter long.

            Entry Price: $75.95

            Entry Time: 9:34 AM

            Stop Price: $72.90

            Risk: $3.05

$OLED Entry on 1 min. chart

Trade Management and Psychology

            9:35AM: I entered this stock with a limit price of $75.95. The spread was wide with a range of $0.50, but with a stop $3.00 away I felt at ease. Far stops can make you a little bolder when entering such wild stocks.  But be warned, entering with a market order could mean murder. My order was instantly filled and I was immediately profitable. But then the price began to flash up and down. It was pretty scary, but still far from my stop so I just listened to my rules. Once the stock settles I knew the price range would shrink.

            9:45 AM: The stock’s spread finally dwindled. I was well in the money, up +1R and just needed to play the waiting game. I have no idea what’s going to happen and I should not presume to know.

Exit Price & Time – Day Trade

            I exit completely at the end of the day. This gave the stock room to play out while putting less emphasis on technical indicators.

            Exit Price: $81.65

            Exit Time: 3:30 PM

$OLED Day Trade Exit on 5 min. chart

$OLED Day Trade Executions

Entry Price & Time – Short Term Swing Trade

            I entered with a limit price for my Interactive Brokers account as well. The same idea and setup was taken for the short term swing trade style as with the day trading account. The only difference was the hold time. After entering my limit price of $75.95 for this account, the price flashed lower after the price break and I got filled at a lower price.

            Entry Date: 2/24/17

            Entry Price: $75.65

            Entry Time: 9:33 AM

            Stop Price: $72.60

            Risk: $3.05

Trade Management and Psychology

            2/24/17: For the first day, my trade management and psychology was identical for both trading styles. Unless my stop was hit I was ready to hold my positions until the designated exit times.

            2/27/17: On the open of the second day, the stock showed strength right out of the gate, at which point I just continued to hold.

            3:30 PM: Honestly, I was hoping this trade would end up being a monster gain. But even if this trade didn't work out, eventually I would hit a big winner. I just didn’t know when. Well, it turned out that this trade was the large winner I was hoping for.

Exit Price & Time

            Adhering to my rules, my position was held overnight. I was expecting the momentum to push it further up, but if the stock crashed I would have closed my position either at my stop or at the close of the second day. To my amazement, the stock went up almost $7.00 higher on the second day.

            Exit Date: 2/27/17

            Exit Price: $88.45

            Exit Time: 3:30 PM

$OLED STWT Exit on 5 min. chart

$OLED STWT Executions

Results and Evaluation

             My trading rules are designed to give me an edge over the market. By focusing on strong gappers into All time highs/lows, I am looking to capitalize on these large momentum stocks. When I'm right I try to hold for as long as possible. But until I close, I never know how much I make, only that I'm in the money. When I am wrong, I have a fixed maximum amount I'm willing to lose. In the long run, my winners will add up to be larger than my losers.

Short Term Swing Trade

Risk: $3.05

Reward: $12.80         

R Multiple: +4.20 R

Day Trade

Risk: $3.05

Reward: $5.70           

R Multiple: +1.84 R