This idea is a play on improvement in semis. I'm not going to pretend to understand exactly what Lam Research does but they provide semiconductor equipment. Their website has all kinds of cool machines that chip makers (TSMC, Samsung, Intel) use to build chips. It's a pick and shovel play in semis.
Chip stocks have been the story of 2026 and they became overbought and crashed hard in July. Lam (LRCX) fell nearly 42% last month. Right now my internal dashboard shows that semis and chips are improving. We see others like TSM breaking out similar to LRCX (and a potential trade in its own right. And the recovery today in LRCX, though early, resembles a lot of swing trades I've taken lately, all of which are up.
Though this relative strength could indicate an early turnaround, I'm still seeing lag in memory, making the overall picture a little unclear. With earnings out of the way Lam doesn't have major gap risk from that.
* Stocks always pull back to the 200-day moving average and Lam came within striking distance of it before recovering. I do like to see overbought conditions wash out and reset so it has that going.
* In its turnaround, LRCX has recovered the short-term moving averages in the 10-day SMA and 21-day EMA, a necessity for early trend development. It's still under the 50-day though by about 2.7%.
* My usual stochastic and MACD checks are just so so right now. Stochastics did not reach full oversold yet, but a bullish crossover on the weekly happened today. Weekly MACD reflects the recent pullback but bearish momentum is waning.
* On the technical side, keeping it simple: today it broke out from the recent consolidation. We're not seeing fireworks in the theme necessarily, with some of these breakouts being less-than-remarkable, so that's a risk.
*My strategy focuses on finding early turns to pursue tight risk. I started watching this one at 307, got in at 326, it's already at 328. The analysis, results, trade management, etc all speak for themselves as I share the names I am watching and trading. My internal read is that the market is tradeable right now, but not like it was in April-May. Pesky bond market.*
https://preview.redd.it/kps32avw2zih1.png?width=1556&format=png&auto=webp&s=7d99edc0d46853cdef58a6378d920a3349e217da