LRCX closes below its opening price unable to hold early session gains
Lam Research Corporation (LRCX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
LRCX ended the week 7.58% higher at 339.30 after losing $2.28 (-0.67%) today on low volume, underperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Trading $2.72 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LRCX as at Feb 14, 2020):
Friday's trading range has been $7.43 (2.18%), that's slightly below the last trading month's daily average range of $7.91. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for LRCX.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, Lam Research closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on January 15th, LRCX actually gained 2.55% on the following trading day.
After having been unable to move above 344.32 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 344.21.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 315.46.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 344.32 where further buy stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Lam Research. Out of 52 times, LRCX closed higher 57.69% 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 65.38% with an average market move of 1.47%.