• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

Lam Research Could Correct With the Broad Market

I would rather stand aside from new commitments until the dust settles.
By BRUCE KAMICH
Feb 20, 2020 | 02:55 PM EST
Stocks quotes in this article: LRCX

During the 'Lightning Round' segment of Mad Money callers get to ask Jim Cramer what he thinks about stocks they are interested in. One caller on Wednesday night asked about Lam Research Corp. (LRCX) : "This stock is a buy on a pullback," said Cramer. Let's check the charts.  

 
In this daily bar chart of LRCX, below, we can see that prices have been in a strong uptrend the past 12 months. LRCX is trading above the rising 50-day moving average line as well as the rising 200-day moving average line. The trading volume has been steady the past year and has risen for the most part on the rallies.
 
The daily On-Balance-Volume (OBV) line has been strong since early June and tells us that buyers of LRCX have been more aggressive.
 
The Moving Average Convergence Divergence (MACD) oscillator has been bullish since July but recently narrowed towards a possible take profits sell signal.  
 
 
 
 
In this weekly bar chart of LRCX, below, we can see that prices are well above the rising 40-week moving average line.
 
The weekly OBV line has been improving from a December 2018 low but it has diverged from the strong price action. The OBV line is well below its previous high.
 
The MACD oscillator turned bullish last February and it remains in the strong configuration. 
 
 
 
In this Point and Figure chart of LRCX, below, we can see that the software is projecting an upside price target in the $380 area.  
 
 
Bottom line strategy: The rally in the broad market is getting very extended and potentially vulnerable to a meaningful decline. LRCX could decline along with the broad market so I would rather stand aside from new commitments until the dust settles. 
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Trading | Semiconductors & Semiconductor Equipment | Technology | Mad Money

More from Investing

Marveling at the Market's Move? It's All About Momentum

James "Rev Shark" DePorre
Jan 19, 2021 4:41 PM EST

No news can explain the action -- whether the bears believe it or not.

Surface Oncology Is Set for Further Gains - How to Buy It

Bruce Kamich
Jan 19, 2021 3:25 PM EST

Here's our price objective.

My Preference With OneSpan Is Calls So I Can Define My Risk

Timothy Collins
Jan 19, 2021 2:36 PM EST

The last few post-earnings beat downs were greeted with optimism once traders got over the initial disappointment.

A Top Biotechnology Play for 2021

James "Rev Shark" DePorre
Jan 19, 2021 2:07 PM EST

Forte's sole clinic candidate is FB-401 for the treatment of atopic dermatitis, which is the scientific name for eczema.

Boot Barn Gets a Quant Upgrade: Do the Charts Fit?

Bruce Kamich
Jan 19, 2021 1:53 PM EST

Here's our latest analysis and trading strategy for the shares.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:09 AM EST GARY BERMAN

    Is Copper About to Turn to Rust?

    Below is a very long-term copper chart.  As you...
  • 08:02 AM EST GARY BERMAN

    Tuesday Morning Fibocall for for 1/19/2021

    SPX (Long-Term View) The 1/8/21 high @ 3826.69 i...
  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login