Don’t be the dog that chased the bus…only to catch it when it slammed on the brakes. Check out Lam Research (LRCX). (April 21, 2017)
LRCX SMH LRCX
I want to look at Lam Research ( NASDAQ:LRCX ) today. You can see why, this stock has been trending upward it seems like almost forever. This is in the semiconductor equipment industry, they make the stuff that makes the semiconductors. A strong industry, semiconductors, basically, have been performing very well. Though you can see this ( ETR:SMH ) is a little worrisome when you see the sector like this, which has been leading the market for a long, long time. If you haven’t been in semiconductors you have had a heck of a time outperforming the market. Whereas if you have been in semiconductors you really haven’t had to be that smart, just follow the trends. Now this has fallen off a bit and now it seems like the whole sector is in consolidation, but that is just more reason to make sure you are in the right stuff.
Lam Research ( NASDAQ:LRCX ) reported a great quarter and you can see what happened: The stock had been in a volatility squeeze and then there is this pent-up potential demand for the stock. Boom! They report great earnings, the stock gaps up, not a huge amount, 5 percent is nothing to sniff at, 5 percent gap up and then it continues to go higher. It closes near the high of the day on massive volume. And then on Friday, actually, volume is twice the average volume and the stock is up another little bit, not a lot but up a little bit. That was on Thursday and then finally Friday the stock is up a little bit more. Since they reported earnings the stock is up almost 10 percent.
I want you to own this stock. I want you to buy Lam Research ( NASDAQ:LRCX ), but after this kind of move I just think it is really tough to be buying it here, and this is why: Whenever I look at a stock like this and I am thinking, “Wow! I want to grab that stock, I think it is getting away from me.” I take a drawing tool and I put it right where the tip is and then I bring it down like this, and then I ask myself, “Self, do I think this stock is never going to come into this box? Is it just going to somehow magically avoid this box? Like it will never come into this box. Instead it is going to tiptoe around it and then keep moving higher.” I can’t say that is going to be the case, maybe we will get another move up on Monday or not. But this is not where you want to be buying this stock.
It is a great stock to own, not where you want to be buying it. I would want to wait a week or two or three. They have already reported earnings so nobody cares after that. We will see if we get any selling pressure. If you can get the stock down another 5 percent or so, from where it is right there, I think that is a good do, I think that will work. Draw your trendline, 50-day moving average, anywhere along here will do. But just right here, this price, this time, not right now, not for me.
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