LRCX closes within previous day's range after lackluster session
Lam Research Corporation (LRCX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
LRCX ended Wednesday at 306.60 losing $2.33 (-0.75%) on low volume, but still outperforming the Nasdaq 100 (-1.67%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (LRCX as at Sep 16, 2020):
Wednesday's trading range has been $8.51 (2.73%), that's below the last trading month's daily average range of $11.46. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LRCX. Prices continued to consolidate within a tight trading range between 299.63 and 314.37 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on September 11th, LRCX actually gained 3.89% on the following trading day.
Prices broke below the key technical support level at 307.06 (now R1), which is likely to act as resistance going forward. After having been unable to move above 312.82 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 314.37.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lam Research. Out of 553 times, LRCX closed higher 56.06% 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 58.05% with an average market move of 1.02%.