Semiconductor equipment maker Lam Research (LRCX) was another winner Thursday that Jim Cramer noted during his Mad Money program Thursday night. LRCX told investors that the coming 5G evolution is creating lots of demand for its equipment inside China. Shares of LRCX popped 13% by the close, and is higher in early Friday morning trade. Let's see what that did for the charts and indicators.
In this daily bar chart of LRCX, below, we can see that LRCX has been in a strong uptrend and yesterday's upside price gap and new high close keeps the uptrend strong. LRCX has been above the rising 50-day moving average line since July and it does not look extended. LRCX is also above the rising 200-day line but does look extended when compared to the action over the past 12 months.
The daily On-Balance-Volume (OBV) line has been moving up the past year and confirms and supports the price action as a rising OBV line is a sign that buyers have been and are more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early July and is now turning up again to a fresh outright buy signal.
In this weekly bar chart of LRCX, below, we can see that prices have nearly tripled in the past three years. Impressive gains. LRCX is above the rising 40-week moving average line and looks a little extended when compared to the price movement in 2017.
The weekly OBV line has been climbing since December, telling us that buyers of LRCX have been more aggressive. The MACD oscillator is rising and in a bullish configuration well above the zero line.
In this Point and Figure chart of LRCX, below, the software is projecting an upside price target of $283. $300 is the next round number and it would also be a price target.
Bottom line strategy: LRCX is in a strong uptrend. Maintain longs and aggressive traders can add to longs on a dip to around $260. $283 and $300 are our nearest price targets for now.
(Lam Research is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells LRCX? Learn more now.)
