LRCX plummets -1.88% closing $5.88 lower
Lam Research Corporation (LRCX) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
LRCX ended the week -0.47% lower at 306.54 after tanking $5.88 (-1.88%) today, strongly underperforming the Nasdaq 100 (-0.82%). This is the biggest single-day loss in over two months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 307.55, the market confirmed its breakout through the prior session low after trading up to $3.76 below it intraday.
Daily Candlestick Chart (LRCX as at Jan 24, 2020):
Friday's trading range has been $12.94 (4.1%), that's far above the last trading month's daily average range of $5.94. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LRCX.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on January 9th, LRCX lost -1.20% on the following trading day. Notwithstanding a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 299.66.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lam Research. Out of 89 times, LRCX closed higher 53.93% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.92% with an average market move of 0.41%.