Lam Research Plunges 7.33% to 3-Month Low on Heavy Volume

Lam Research (LRCX) declined 7.33% in the latest session to close at $99.51, marking the lowest close since early June 2025 on heightened volume of 23.14 million shares. This sharp downturn prompts a multidimensional technical assessment of the stock’s trajectory.
Candlestick Theory
The recent price action shows a bearish engulfing pattern forming on August 15, 2025, as the long red candle completely overshadowed the prior three sessions’ gains. This occurred near the psychological $100 support level ($99.26 intraday low), which now serves as critical short-term support. Resistance is firmly established at $105–$107, evidenced by the August 13–14 session highs where upper wicks rejected prices near $108. The May 30, 2025 hammer low at $79.49 anchors major long-term support, while the July 22 high at $101.12 remains a technical ceiling.
Moving Average Theory
The 50-day SMA ($101.50) crossed below the 100-day SMA ($102.80) in early August, confirming a bearish near-term death cross. The 200-day SMA ($91.00) maintains a positive slope, indicating the primary trend remains bullish but is losing momentum. Current trading below all three key moving averages reflects sustained selling pressure, with the 50-day acting as immediate resistance. Failure to reclaim this level may signal further downside.
MACD & KDJ Indicators
The MACD (12,26,9) entered negative territory in late July with sustained bearish histogram expansion, signaling growing downward momentum. Meanwhile, the KDJ oscillator shows the %K and %D lines deeply oversold below 20, last observed during the April 2025 pullback. While this hints at potential exhaustion, the absence of bullish crossover divergence suggests sentiment remains fragile. Both indicators align in signaling continued bearish pressure, though KDJ’s extreme reading implies a technical rebound could develop.
Bollinger Bands
A pronounced Bollinger Band contraction preceded the August 15 breakdown, reflecting declining volatility ahead of a directional move. The close below the lower band ($101.50) signals an oversold extremity and potential mean-reversion bounce. However, expansion of the bands post-breakdown indicates volatility surge, which typically favors trend continuation. The $101–$102 lower band now becomes dynamic resistance.
Volume-Price Relationship
The 7.33% sell-off was confirmed by volume surging 107% above the 30-day average, underscoring robust distribution. Notable bearish volume clusters emerged during the March 2025 peak and the recent August decline, validating breakdowns at resistance. Conversely, the April–June rally saw volume confirm upside breaks, including the 18.02% surge on April 9. Current volume patterns support bearish momentum sustainability below $100.
Relative Strength Index (RSI)
The 14-day RSI (28.6) entered oversold territory for the first time since April. While this may precede a short-term bounce, the indicator’s failure to hold above 40 during July’s rebound signaled underlying weakness. Bearish divergence occurred in late July when price made a higher high ($108.02) while RSI peaked at 62, foreshadowing the current correction. Oversold conditions carry more weight if other reversal signals emerge.
Fibonacci Retracement
Applying Fibonacci to the April 2025 low ($56.32) and July 2025 high ($108.02) reveals critical levels. The 38.2% retracement ($87.20) aligned with June’s consolidation, while the 50% level ($82.17) coincides with the May 2025 support. Current prices near the 23.6% retracement ($95.50) face immediate resistance at $100–$101. A decisive break below $99 may target $87–$82, where the 38.2–61.8% zone converges with the 200-day SMA.
Confluence and Divergence Notes
Confluence of bearish signals is evident: The breakdown below $100 coincided with the death cross, MACD downtrend, and volume-backed Bollinger breakdown. RSI and KDJ oversold readings offer the sole counterpoint, lacking bullish divergence. Probabilistically, sustained trade below $100 favors bearish continuation toward the $87–$82 Fibonacci confluence, though oversold oscillators suggest tactical rebounds toward $105 resistance may emerge before resuming downside. A recovery above $107 would invalidate the bearish structure.