Is United Microelectronics Setting Up for a Big Move?

United Microelectronics Corp. (UMC) has been trading in a large range this year and has recently moved into a smaller range where it has formed a resi...

By Christian Tharp via StockNews

This story originally appeared on StockNews

United Microelectronics Corp. (UMC) has been trading in a large range this year and has recently moved into a smaller range where it has formed a resistance line and a level of support. If the stock breaks through either level, a big move is expected. Read more to learn how to take advantage of this trade.

United Microelectronics Corp. (UMC) is the world's third- largest dedicated chip foundry, with a 7% market share. The company features a diverse customer base including Texas Instruments (TXN), MediaTek, Qualcomm (QCOM), Broadcom (AVGO), Xilinx (XLNX), and Realtek, supplying a wide range of products applied in communications, display, memory, automotive and more.

On Monday, the company reported its sales for June. Revenue came in at $17.3 million, which was a 18.9% year over year increase from the same month last year. In addition, the global chip shortage may provide the company an opportunity to gain market share from bigger players in the industry.

As of the most recent reported quarter, UMC had $4.4 billion in cash which compares very favorably to only $185 million in short-term debt. The company also has a solid net profit margin of 17.1%. In terms of growth, UMC has grown earnings an average of 34.3% per year over the past five years.

Analysts expect earnings to surge 180% year over year next quarter. From a valuation standpoint, the stock appears a bit undervalued with a forward P/E of 17.79. The stock is up 11.6% for the year, but has shown mixed performance since February as noted in the chart below.

Take a look at the 6-month chart of UMC below with added notations:

Chart of UMC provided by TradingView

UMC has been trading within a large range in 2021 and has moved into a smaller range during recent weeks. While in that range, the stock has formed a resistance level at around $9.80 (red), and a level of support at $9 (green).

Click Here to Read the Greatest Trading Book Ever Written

At some point, the stock will either break the resistance or the support.. The possible long position is on a breakout above $9.80. The ideal short opportunity would be on a break below $9.

Want to Discover More Great Trades?

I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don't work at all.

That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!

5 WINNING Stock Chart Patterns

Have a good trading day!

Good luck!

Christian Tharp, CMT


UMC shares fell $9.41 (-100.00%) in premarket trading Thursday. Year-to-date, UMC has gained 9.25%, versus a 15.50% 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.


The post Is United Microelectronics Setting Up for a Big Move? appeared first on

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

Meteorologist Breaks Silence on Horrifying On-Air Collapse: 'I Started to Feel a Little Nausea'

KCAL meteorologist Alissa Carlson Schwartz fainted on-air during a live broadcast over the weekend.


How Do I Know I'm Getting the Most Out of My Business? The Answer Is Obvious — Yet Overlooked.

Explore how you can leverage first-party data to drive better results and make more informed decisions.


4 F1 Racing Lessons That Can Accelerate Your Career

For F1 drivers like Lewis Hamilton and Max Verstappen, these racing lessons are second nature, but they don't just apply to the tracks — they can also help to position you as a leader and accelerate your success as an entrepreneur.