Lam Research Corp. (LRCX) corrected lower in price from March to late October but the On-Balance-Volume (OBV) line marked its low in the middle of October. This subtle difference is the start of a recovery rally in my opinion.
Let's drill down in the charts and indicators for more clues on LRCX's next move.
In this daily bar chart of LRCX, below, prices rallied above the flat 50-day moving average line last month and the 200-day average line is beginning to flatten out after a decline.
As mentioned above we can see that the OBV line has improved from the middle of October signaling a shift from aggressive selling to aggressive buying.
The Moving Average Convergence Divergence (MACD) oscillator has been improving from the middle of September. This oscillator is back to the zero line so further price strength is likely to generate an outright go long signal.
In this weekly bar chart of LRCX, below, we can see that prices are below the declining 40-week moving average line.
The weekly OBV line shows a peak in November of last year and a decline to late September.
The improvement in the OBV line the past two months is a positive and so is the crossing of the MACD oscillator to a cover shorts buy signal.
In this Point and Figure chart of LRCX, below, we can see a base or accumulation pattern and an upside price target of $196.70 being projected.
Bottom line strategy: Bottoms (and tops, too) can be difficult affairs. Bottoms are often accompanied by bearish news and traders have no lack of that today. It will feel like forever until the closing bell today - focus on the price action of individual names like LRCX.