Lam Research Surges 4.90% as Technicals Signal Bullish Reversal

Lam Research (LRCX) gained 4.90% in the most recent trading session, closing at $137.81 after trading between $136.58 and $138.90, a move that follows substantial recent volatility. This analysis examines key technical indicators to assess potential future price direction.
Candlestick Theory
Recent candlestick patterns show a significant bullish reversal signal. The session on October 10, 2025, formed a long red candle (open: ~$141, close: $131.37), indicating strong selling pressure. However, the subsequent 4.90% green candle on October 13 closed near its high after holding above the October 10 low of $131.02, suggesting absorption of selling pressure and emerging buyer interest. Key support is established at $131.02–$131.37, with resistance near $138.90–$141.80. A confirmed breakout above $141.80 could signal a bullish resumption, while failure to hold $131 risks testing the $125–$126 support zone from September 2025.
Moving Average Theory
The moving average structure remains bullish. Approximated averages place the 200-day MA at ~$100, the 100-day MA at ~$110, and the 50-day MA at ~$130. The current price ($137.81) trades above all three, preserving the sequence 200DMA < 100DMA < 50DMA < price, indicating an ongoing uptrend. Notably, the recent pullback to $131.02 tested and respected the 50-day MA as dynamic support. This configuration reinforces the long-term uptrend, though a decisive close below the 50-day MA would weaken the bias.
MACD & KDJ Indicators
Momentum oscillators suggest bearish pressure is easing. The MACD histogram likely bottomed during the October 10 sell-off, with the rebound on October 13 initiating a potential bullish crossover (MACD line crossing above signal line). The KDJ oscillator shows the %K line recovering sharply from oversold territory, rising from near 0 to ~37. While %K remains below the neutral 50 level, its upward trajectory and divergence from the October 10 price low hint at waning downward momentum. A sustained rise above %K 50 could support reversal prospects.
Bollinger Bands
Bollinger Bands expanded sharply during the October 7–10 decline, reflecting heightened volatility. The price touched the lower band on October 10, often a support area in downtrends, before rebounding toward the 20-day middle band (~$136–$137). This stabilization without new lows, coupled with band expansion, implies bearish exhaustion. A contraction in bandwidth may now precede the next directional move. Price reclaiming the middle band would reinforce short-term bullish sentiment.
Volume-Price Relationship
Volume dynamics show mixed signals. The October 10 sell-off recorded 18.75 million shares—the highest volume in a month—validating bearish conviction. However, the October 13 rebound occurred on just 9.6 million shares (~48% lower volume), suggesting cautious accumulation rather than aggressive buying. For the recovery to gain credibility, subsequent gains require volume expansion. The divergence between high-volume selling and low-volume buying warrants caution despite the bullish price reversal.
Relative Strength Index (RSI)
The 14-day RSI rebounded from oversold (<30) during the October 10 low to ~45–50 by October 13, alleviating extreme bearish pressure. However, it remains below the neutral 50 level, reflecting residual weakness. Historically, RSI divergences have preceded reversals (e.g., higher lows in RSI during September’s $108.29 low versus June’s $89.52 low). Current RSI positioning permits further upside but does not yet confirm a robust bullish trend reactivation. Sustained trading above 50 RSI is needed to strengthen momentum.
Fibonacci Retracement
Applying Fibonacci levels to the downswing from $149.15 (October 6 high) to $131.02 (October 10 low) yields key levels: $135.30 (23.6%), $137.94 (38.2%), $140.08 (50%), and $142.23 (61.8%). The October 13 close at $137.81 positions LRCX near the 38.2% retracement. Confluence exists here, as this level aligns with psychological resistance at $138 and the upper bound of the October 13 candle. A decisive break above $137.94 would target $140.08–$142.23, whereas rejection could retest $135.30 or lower.
Confluence and Divergence
Confluence is notable at $135–$138, where Fibonacci resistance (38.2%), moving average support (50-day MA), and candlestick rejection converge, strengthening this zone’s technical significance. Bearish divergence exists between price and volume: the recent rally lacks volume confirmation compared to the high-volume sell-off. Additionally, RSI has yet to break above 50 despite the price rebound, suggesting momentum lags price recovery. These divergences advise vigilance for false breakouts or renewed downside pressure below $135. A volume-backed close above $142.23 would resolve these concerns and signal trend resumption.