Lam Research (LRCX) designs and builds products for semiconductor manufacturing. In my March 1 review of LRCX I wrote that "The price action on LRCX looks right but the volume indicators are not (yet) on board."
Let's check out the charts and technical indicators to see if the volume is better.
In the updated daily bar chart of LRCX, below, I can see that prices have been surging higher in May. The shares broke out from a base pattern around $550. The slope of the 50-day moving average line is now positive and so is the slower-to-react 200-day line.
The On-Balance-Volume (OBV) line started to rise in May and the trading volume has improved since early March. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of LRCX, below, I can see that the shares have broken out from an inverse head-and-shoulders bottom formation. Prices trade above the rising 40-week moving average line.
The weekly OBV line shows strength and confirms the price gains. The MACD oscillator is in a strong bullish alignment above the zero line.
In the daily Point and Figure chart of LRCX, below, I can see an upside price target of $639. We're here.
In this weekly Point and Figure chart of LRCX, below, I can see a price target in the $815 area.
Bottom-line strategy: LRCX is in a strong technical position. Try to buy LRCX around $625 risking to $590. Our potential price target is $815.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
