Lam Research Surges 8.3% on Bullish Technical Indicators, Two-Day Gains Hit 10.12%

Lam Research (LRCX) has surged 8.30% in the most recent session, marking two consecutive days of gains with a cumulative 10.12% rise. The stock closed at $231.01 on February 6, 2026, following a volatile period characterized by sharp swings between $204.57 and $246.62 in early February. This volatility suggests heightened market participation and potential short-term momentum.

Candlestick Theory

Recent candlestick patterns indicate a potential bullish reversal. The two-day rally from $213.31 to $231.01 forms a strong green candle with a long lower shadow, suggesting buyers regained control after a prior bearish phase. Key support levels are identified at $205 (prior low on February 4) and $195 (a multi-week pivot), while resistance clusters at $230–$240. A break above $230.10 (February 3 high) could validate a bullish continuation, while a retest of $209.78 (February 4 close) may act as a critical filter for further downside.

Moving Average Theory

Short-term momentum aligns with a bullish crossover scenario. The 50-day MA (calculated as ~$215–$220) has crossed above the 200-day MA (~$190–$195), suggesting a medium-term uptrend. The 100-day MA (~$205) acts as a dynamic support. However, the 200-day MA’s lagging nature implies caution if the price fails to sustain above $220, as this could trigger a retest of the 50-day MA for confirmation.

MACD & KDJ Indicators
The MACD histogram has expanded positively in recent sessions, reflecting strengthening bullish momentum. A golden cross in the MACD line (above zero) supports continuation of the uptrend. The KDJ stochastic oscillator (K at ~80, D at ~75) indicates overbought conditions, but the absence of bearish divergence suggests the rally may persist. However, a close below the 50-level in the KDJ would signal weakening momentum.

Bollinger Bands

Volatility has spiked, with the recent close at $231.01 near the upper Bollinger Band (calculated at ~$230–$235). This suggests a potential exhaustion of upward momentum, increasing the likelihood of a short-term pullback toward the mid-band (~$220). The 20-day volatility contraction observed in late January (prior to the February rally) acted as a precursor to the breakout, reinforcing the validity of the current move.

Volume-Price Relationship

Trading volume has surged in tandem with the recent rally, with the February 6 session recording ~13.85 million shares traded—well above the 10-day average. This volume validates the strength of the price action. However, if volume declines in subsequent up sessions while the price remains above $230, it may indicate waning conviction. Conversely, a spike in volume on a pullback could signal accumulation at key support levels.

Relative Strength Index (RSI)

The 14-day RSI has pushed into overbought territory (~75), aligning with the KDJ readings. While this typically warns of potential corrections, the absence of bearish divergence (price higher, RSI lower) suggests the trend may persist. A drop below 60 would signal a shift in momentum, potentially triggering a test of the 50–55 RSI threshold for renewed buying interest.

Fibonacci Retracement

Applying Fibonacci levels to the January 15–February 3 rally ($194.76 to $246.62) identifies key retracement levels. The current price of $231.01 aligns with the 23.6% retracement level (~$230). A break above this could target the 38.2% level (~$225) and eventually the 50% level (~$220). Conversely, a failure to hold above $220 may see the price retest the 61.8% level (~$205) as a critical support.

Confluence and Divergences
Strong confluence exists between the bullish moving average crossover, expanding MACD, and high-volume rally, all supporting continuation. However, overbought conditions in RSI and KDJ suggest caution. A divergence between price and RSI (e.g., higher highs with lower RSI) would signal a potential reversal risk. Conversely, a sustained break above $230.10 with increasing volume would validate a new bullish phase, while a close below $209.78 would invalidate the immediate uptrend.

Conclusion

LRCX’s recent surge reflects a confluence of technical strengths, but overbought indicators and volatility suggest short-term caution. Traders may monitor the $230–$235 resistance cluster and volume dynamics for clues on trend sustainability. A breach of $230.10 could extend the rally, while a retest of $205–$209 would be critical for downside protection. Probabilistic scenarios favor continuation of the uptrend in the near term, provided volume remains supportive and key support levels hold.