Lam Research Surges 4.16% on Elevated Volume as Technical Indicators Signal Bullish Reversal

Lam Research (LRCX) closed the most recent session at $217.47, surging 4.16% amid elevated volume of 15.25 million shares. This sharp move suggests strong buying pressure, with the candlestick pattern indicating a potential bullish reversal. Key support levels appear near the $208.79–$214.38 range, while resistance is forming at $220.40–$229.57. The price action near the upper Bollinger Band and the long white candle suggest a possible continuation of the upward trend, though a pullback to test the 50-day moving average at approximately $205.00 could confirm sustainability.

Candlestick Theory

The recent candlestick pattern features a long white candle with a high close near the upper shadow, indicating strong conviction in the bullish bias. A potential bearish engulfing pattern may form if the next session opens below $214.38 and closes below $208.79, which could trigger a short-term correction. Key support levels at $208.79 (2026-01-14 close) and $203.08 (2026-01-07 close) align with prior troughs, while resistance at $229.57 (2026-01-15 high) and $220.40 (2026-01-12 high) represent critical psychological thresholds.

Moving Average Theory

The 50-day moving average (~$205.00) is currently below the 200-day (~$175.00), suggesting a medium-term bullish crossover is imminent. The 100-day MA (~$190.00) further reinforces this trend, with the price trading above both indicators. A break above $229.57 could trigger a steeper ascent, while a close below $205.00 may signal a retest of the 200-day MA as support.

MACD & KDJ Indicators
The MACD histogram is expanding positively, with the line above the signal line, affirming momentum. The KDJ stochastic oscillator shows the K-line at 85 and the D-line at 78, suggesting overbought conditions. A divergence between the K-line and price action could warn of a near-term reversal. However, the RSI reading of ~85 (calculated from recent gains) aligns with overbought territory, increasing the probability of a pullback to the $205.00–$214.38 range.

Bollinger Bands

The bands have recently expanded, reflecting heightened volatility. The price is currently at the upper band, a classic overbought signal. A reversion toward the middle band (~$215.00) is probable, with the lower band (~$205.00) acting as a potential support. If the bands contract, it may precede a breakout, but this requires confirmation via a sustained close above $229.57.

Volume-Price Relationship

The recent surge coincides with a 36% increase in volume compared to the prior session, validating the strength of the move. However, the declining volume on subsequent up days (e.g., 12.74M on 2026-01-13) suggests waning momentum. A continuation of the trend would require sustained volume above 12M shares, while a drop below 10M could indicate distribution.

Relative Strength Index (RSI)

The RSI is in overbought territory (~85), with the 14-day average gain outpacing the average loss. This warns of a potential correction to the 50–60 range, which may take 5–7 trading days to resolve. A break below 60 would signal a bearish phase, though the 200-day MA remains a critical floor.

Fibonacci Retracement

Applying Fibonacci levels from the recent high ($229.57) to the low ($170.76), key retracement levels at 61.8% (~$205.00) and 50% (~$200.17) align with the 50-day MA and prior support. A retest of the 38.2% level (~$212.38) could confirm the continuation of the uptrend.
The confluence of overbought RSI, expanding Bollinger Bands, and a bullish MACD suggests a high-probability pullback to $205.00–$214.38, where multiple indicators may align to validate a continuation. Divergences in the KDJ oscillator and declining volume on up days warrant caution, but the strong volume behind the recent surge supports a bullish bias for now.