LRCX closes within prior day's range
Lam Research Corporation (LRCX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
LRCX ended the month 16.6% higher at 377.16 after edging lower $1.38 (-0.36%) today, strongly underperforming the Nasdaq 100 (1.78%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (LRCX as at Jul 31, 2020):
Friday's trading range has been $10.87 (2.86%), that's slightly below the last trading month's daily average range of $10.97. 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 slightly lower than usual for LRCX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on July 24th, LRCX actually gained 3.58% on the following trading day.
Prices are trading close to the key technical support level at 367.56 (S1). After having been unable to move above 381.48 in the prior session, the share ran into sellers again around the same price level today, missing to move higher than 380.16.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 349.34.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 381.48 where further buy stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lam Research. Out of 558 times, LRCX closed higher 55.91% 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 57.89% with an average market move of 1.05%.