LPL - Is LG Display Headed for a Breakdown?
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, sales hit all-time high due to strong sales in TV displays including OLED. Also supporting revenue 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 33% year over year in the current quarter and 36.8% for the year.
LPL’s stock appears undervalued with a forward P/E of just 7.52. 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
Over the past seven months, LPL a major level of support has emerged around the $9.50 (green) area. That line is also the “neckline” for the stock’s head and shoulders (H&S) reversal pattern. Above the neckline you can see the H&S pattern (blue) has been completed.
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Confirmation of the bearish H&S pattern would occur if LPL were to break the support, and lower prices would be expected from there. Therefore a short trade to be entered on a break below the $9.50 level.
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LPL shares were trading at $9.56 per share on Wednesday morning, down $0.03 (-0.31%). Year-to-date, LPL has gained 13.27%, versus a 19.47% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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