Don't Ignore This Chart!

LRCX is Breaking To New Highs While Relative Strength is Picking Up


On the Relative Rotation Graph for technology stocks, LRCX stands out, with its relatively long tail and its push into the leading quadrant at a strong RRG-Heading. Such a rotation is more than enough reason to open up a regular chart for further investigation.

The chart above shows LRCX on a weekly scale with relative strength and the RRG-Lines. The number one clue signaling further upside for LRCX is the break to new highs. Last week's jump closed 20 cents above the March high at $227.70 (short dashes) and solidly above the (IMHO) more reliable resistance level just below $220 (long dashes). This week, with two more trading sessions to go, LRCX is continuing higher.

The price action of the last two weeks brought the RS-Line above its falling resistance as it started to move higher, with a new series of higher highs and higher lows emerging in relative strength. The resulting RRG-Lines are now moving higher in tandem after RS-Ratio dipped at the 100-level and started to move higher again.

All in all, the combination of a break to new highs with improving relative strength make this a stock worth watching.

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Julius de Kempenaer

Senior Technical Analyst,

Creator, Relative Rotation Graphs

Founder, RRG Research

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Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More
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