Here’s why we bought Lam Research ($LRCX) yesterday. (January 12, 2021)

by DAN LRCX 

I want to look at Lam Research ( NASDAQ: LRCX ). Why you may ask? Because this is a stock that I featured yesterday in our premium section at Stock Market Mentor. I was looking at the stock to see that it had kind of traversed this volatility squeeze, the Bollinger Bands, and traded up here, average volume.

The prior day, which was Friday traded lower on slightly heavier volume. But then Monday, yesterday, this is why I was looking at this, the stock really completely reversed. It gapped down and then it closed higher, higher than it had opened the day before. So if we just look at where this stock had traded the other day, yesterday, it essentially engulfed this entire day’s trading range and even the day before.

When you see this type of thing and it’s close to the upper Bollinger Band, that’s a reversed pattern. That’s the type of thing that you look at for more continuation. And so sure enough, today we got that continuation on even higher volume. So this stock continues to work, obviously, it has had a heck of a run already. But if you look at the weekly chart you will see these zigzags, a pullback, and then a nice move to the upside, and then a pullback. It looks like this, a nice move to the upside is just starting.

I would stay long this stock if I were you. It would be nice to see it come in a little bit so it was a little bit easier to buy. But I do think that, ultimately, if you get any kind of an opportunity to buy this stock I think this is going to work for you; because institutions are coming for this stock, you can see it in the volume.

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