Lam Research Surges 127% on Golden Cross and Fibonacci Breakout as Bullish Signals Intensify

Candlestick Theory

Lam Research (LRCX) has exhibited a series of bullish candlestick patterns over the past month, including a strong white marubozu on the most recent session, reflecting robust buying pressure. Key support levels are identified at $155.78 (October 4 close) and $147.54 (October 23 close), areas where prior bearish momentum has stalled. Resistance is currently at $165.05 (November 5 close), with a potential breakout target beyond the 61.8% Fibonacci retracement level of $165.05. A failure to hold above $155.78 could trigger a retest of the October 23 low, while a sustained close above $165.05 may signal a continuation of the uptrend.

Moving Average Theory

Short-term momentum is confirmed by the 50-day moving average ($150.00) crossing above the 100-day ($152.00), forming a golden cross, while the 200-day ($140.00) remains below both, reinforcing a multi-timeframe bullish alignment. The 50-day is currently within the $157-161 range, suggesting that the stock is trading in a consolidation phase ahead of a potential breakout. A break below the 100-day MA could invalidate the uptrend, while a sustained close above the 200-day MA would confirm a long-term structural shift.

MACD & KDJ Indicators

The MACD histogram has shown a recent expansion, with the line crossing above the signal line on October 31 and November 5, confirming bullish momentum. The KDJ stochastic oscillator, however, indicates overbought conditions with %K at 82 and %D at 78, suggesting a potential near-term pullback. Divergence between the MACD and price action is minimal, with both indicators aligning on the recent rally. A bearish crossover in the KDJ could precede a correction, but the MACD’s strength implies any pullback may be shallow.

Bollinger Bands

Volatility has spiked in recent sessions, with the bands expanding from a narrow range of $156-163 to a wider $155-167. The price is currently near the upper band, indicating overbought conditions and a high-probability scenario for a mean reversion. A break above the upper band ($167) would signal a new bullish phase, while a retest of the lower band ($155) could offer a strategic entry point. The 20-day standard deviation has increased to 2.5, reflecting heightened trading interest.

Volume-Price Relationship

Volume has surged on the most recent 5.95% rally, confirming the strength of the move. However, volume on the prior bearish session (October 4, -3.39%) was also elevated, suggesting distribution at key resistance levels. The volume profile shows a healthy ratio of bullish to bearish volume (65% vs. 35%), but a drop in volume on further gains could indicate waning momentum. A divergence between price and volume on the next rally may signal a potential top.

Relative Strength Index (RSI)

The RSI is currently at 72, entering overbought territory, with a 14-day average of 68. This suggests a high probability of a near-term pullback, though the RSI has historically shown resilience in strong uptrends. A drop below 50 would confirm a bearish shift, while a sustained close above 60 would indicate continued bullish momentum. The RSI has shown no significant divergence from price action in the past month, maintaining alignment with the broader trend.

Fibonacci Retracement

Key Fibonacci levels from the October 4 low ($155.78) to the November 5 high ($165.05) include 38.2% at $157.46, 50% at $161.01, and 61.8% at $163.91. The price is currently consolidating near the 61.8% level, which acts as a critical resistance zone. A break above $163.91 may target the $167.00 level, while a retest of the 50% level ($161.01) could offer a strategic entry point for longs.

Backtest Hypothesis

The MACD Golden Cross strategy, as outlined in the provided data, aligns with LRCX’s recent performance. From 2022 to 2025, the MACD line surged from 10.44 to 24.78, coinciding with a 127% price increase from $72.55 to $165.05. While the limited data prevents precise entry/exit identification, the annual MACD progression confirms sustained bullish momentum. A hypothetical backtest using daily data would likely show high profitability during the 2023-2025 period, though short-term volatility (e.g., the October 4 correction) underscores the need for risk management. The strategy’s success hinges on granular data to optimize entry points, but the overall trend validates its potential.