Looking at Lam Research Corp. (LRCX) this morning, I noticed that I have not written about the stock since late December when I did not have a firm conviction. I wrote that "Okay Mr. March [of the $64,000 question] will LRCX go up or go down from here? I do not have a strong conviction here."
The Point and Figure chart gave clear signals "In this Point and Figure chart of LRCX we can see the price action but we remove some of the 'noise.' A trade up to $193.55 will be a small double top breakout and a decline to $180.53 will weaken the chart. I think it is interesting that a $221.73 price target is shown."
Looking at an updated daily bar chart (below) we can see that LRCX responded to both price points in the first quarter. Let's check out the charts and indicators again.
In this daily bar chart of LRCX, below, we can see a zenith in March followed by a decline into late June/early July. An upside reversal could be underway. The other day prices gapped up above the declining 50-day moving average line and touched the underside of the flat 200-day moving average line.
The daily On-Balance-Volume (OBV) line has been firming from late June and suggests that buyers of LRCX have become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early July for a cover shorts buy signal. This indicator is close to crossing the zero line now for an outright go long signal.
In this weekly bar chart of LRCX, below, we can see a market that could be at a turning point. Prices have rallied to the underside of the flat to slightly declining 40-week moving average line. A weekly close above $195 would break the line.
The weekly OBV line has been in a downtrend from December but shows some improvement in recent weeks. More information is needed to show a new uptrend.
The trend-following MACD oscillator has narrowed in recent weeks and is now closer to a possible cover shorts buy signal.
In this Point and Figure chart of LRCX, below, we can see a nearby price target of $194.84. Strength above $207 is needed for a much more bullish price projection.
Bottom line: The charts of LRCX are not super strong but we do have a clear risk point just below $170. Aggressive traders could go long LRCX around $190 or better risking a close below $170.