After Hours: Playing Universal Display Long, Short On STEC And Rovi

Includes: OLED, ROVI, STEC
by: Midnight Trader

Below is a brief recap on each of the top-volume, news-driven movers in Tuesday's after hours, taking a look at specific stocks' after hours movement and how that trade may offer insight into potential floor supports, ceilings and trading ranges that could develop in Wednesday's pre-market and early regular session.


Universal Display (NASDAQ:PANL) advanced 8.2% to 53.50 in Tuesday's after hours trade on the back of better-than-expected Q3 results. PANL vaulted to an early evening high of 56. Sellers were aggressive off the top, driving PANL as low as 50.43 before it steadied between 52.02 and 53.94 through the late first-half and second-half of evening action. A pre-bell open Wednesday may have potential surrounding the 53 area. Buyers looked most confident Tuesday night off the 50.43 mark up to 53, a possible near-term floor support for longs to watch and possibly catch some upside turns back into the mid- to higher-53s.


STEC (NASDAQ:STEC) tumbled 16.5% to 9.76 in Tuesday's after hours trade after beating Q3 expectations but issuing Q4 guidance below Street estimates. STEC plummeted to an early after hours low of 9.00 before popping to about 10.48. It settled between 10.10 and 9.50 through the bulk of its evening action. A pre-market open Wednesday may have potential surrounding the 9.75 mark. STEC has recorded an earnings-driven after hours decline in five of the last 10 quarters tracked in our database. Also, 60.0% of the time (3 out of 5 times) the stock followed-through in the same direction by the close of the next day's regular session compared to the Extended Hours "effective close." When it followed-through, the price closed further in the same direction on average by 5.9% (in 3 events) from the effective close. While the historical data provides some support for a short play on STEC Wednesday, we would still be cautious in the shares to start as there was some steady buying off the 9.50 mark up to 9.65, a potential floor support for more risk tolerant longs to watch. On the short side, the 10.48 to 10 area set up as a ceiling level through the first-half of night trade, levels for shorts to eye.

Rovi (NASDAQ:ROVI) plummeted 21.7% to 36 in Tuesday's evening trade after posting Q3 revenue that was just shy of Street estimates. ROVI dropped from 45.01 to 36.71 in the late first-half of night trading. It continued heading lower into the mid-session and second-half, sliding from 38.20 to a late bottom of 35. A pre-market open Wednesday may have potential near 36 to 35. Sell momentum was vigorous through the late downside run and would indicate ROVI may have legs to head deeper in the red on Wednesday. Early shorts may want to target potential entry points near 37.30 to 35.50, levels where downside liquidity started picking up Tuesday night before the stock slumped to its lows at 35.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.