Lam Research (LRCX) is set to report its latest earnings numbers on Wednesday. Let's check out the charts and indicators of this semiconductor processing equipment maker.
In this daily bar chart of LRCX, below, we can see that prices corrected sharply from February into March - an all too familiar sight. Prices have rallied back smartly from March to stay above the rising 200-day moving average line and now above the bottoming 50-day moving average line.
The movement of the On-Balance-Volume (OBV) line is impressive. There is only a minor decline for the OBV line from the middle of February into March. The OBV line has improved in recent weeks and tells us that buyers of LRCX are being more aggressive and that is a strong vote for continued price strength.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line for an outright go long signal.
In this weekly bar chart of LRCX, below, we can see that prices corrected a significant percentage of the 2019-20 advance. Prices have rebounded in recent weeks and now trade above the rising 40-week moving average line.
The weekly OBV line shows only a small decline and a subsequent firming giving us an overall positive view now.
The MACD oscillator is still above the zero line and beginning to narrow towards a fresh outright go long signal.
In this daily Point and Figure chart of LRCX, below, we can see a potential upside price target of $404.
Bottom line strategy: LRCX might pull back a bit in the week ahead if the broad market weakens but the longer-term prospects of LRCX are positive. Trade from the long side and risk below $250. The $404 area is our price objective in the months ahead.
