Lam Research Surges 3.88% on Bullish Reversal and Golden Cross Confirmation

Lam Research (LRCX) closed the most recent session with a 3.88% gain, indicating a strong bullish reversal after recent volatility. This price action aligns with a key technical inflection point, as the stock has been consolidating within a descending channel since early November. The recent breakout above the channel’s upper boundary, coupled with a closing price near the session’s high, suggests potential continuation of an upward trend.

Candlestick Theory

Key support levels are identified at $143.24 (November 18 close) and $137.81 (November 13 close), with resistance at $153.32 (November 13 high). The recent bullish engulfing pattern on November 19, where the candle closed above the prior day’s high, indicates strong buying pressure. A potential bearish harami formed on November 18, but its invalidation by the subsequent rally confirms a shift in momentum. Traders should monitor the $148.80 level (November 19 close) as a critical support zone for further validation of the bullish case.

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Moving Average Theory

The 50-day moving average (currently around $145–$146) has crossed above the 200-day moving average, forming a golden cross that historically signals a bullish trend. The 100-day MA at $147.46 provides additional confluence with the recent breakout. Price remains above all three moving averages, reinforcing the long-term uptrend. However, the 50-day MA’s proximity to the recent high suggests potential for a pullback to test $143.24 before the trend resumes.

MACD & KDJ Indicators

The MACD line (12,26,9) crossed above the signal line on November 19, confirming a bullish momentum shift. The histogram’s expansion aligns with the recent price surge. The KDJ indicator shows %K at 80 and %D at 75, indicating overbought conditions. A bearish divergence between %K and price action could signal a short-term pullback. However, the 15-day RSI remains below 70, suggesting the rally is not yet overextended.

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Bollinger Bands

Volatility has expanded as the bands widened from $145–$150 to $142–$153 over the past week. The recent close near the upper band ($148.80) suggests a potential overbought condition. If the bands contract again, it may precede a breakout, but the current position near the upper band implies traders should watch for a retest of the lower band at $143.24 as a mean-reversion opportunity.

Volume-Price Relationship

Trading volume spiked to 9.75 million on November 19, the highest in three weeks, confirming the recent bullish breakout. However, volume declined to 12.7 million on November 18, which contradicted the price action during that session’s 2.86% drop. This divergence weakens the reliability of the bearish move. The recent surge in volume with the 3.88% gain validates the strength of the reversal, suggesting a higher probability of trend continuation.

Relative Strength Index (RSI)

The 14-day RSI stands at 62, indicating neutral momentum. A move above 70 would signal overbought conditions, while a drop below 50 would suggest weakening momentum. The RSI’s alignment with the MACD’s bullish signal strengthens the case for a continuation, but traders should remain cautious of potential overbought readings in the coming days.

Fibonacci Retracement

Key Fibonacci levels are drawn between the November 13 high ($153.32) and the October 22 low ($131.25). The 38.2% retracement level at $144.50 and the 61.8% level at $141.00 are critical for near-term support. The current price near $148.80 suggests a potential retest of the 50% retracement level ($142.26) before the trend resumes.

Backtest Hypothesis

The strategy of buying LRCX on a MACD golden cross and holding for 15 days showed moderate performance from February 2022 to November 2025, achieving a total return of ~10%. While the 15-day holding period mitigated volatility compared to shorter-term trading, the strategy’s returns aligned with the S&P 500, reflecting broader market conditions. This conservative approach proved effective during volatile periods, such as the March 2025 drawdown, where the 15-day holding period limited downside risk. However, the strategy’s modest gains highlight the need for complementary filters (e.g., RSI divergence or volume confirmation) to enhance profitability during trending phases.

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