Lam Research Corporation designs, makes, markets, refurbishes and services semiconductor processing equipment for integrated circuit production across the US, China, Korea, Taiwan, Japan, Southeast Asia and Europe. It is in the Technology Semiconductor sector and trades on Nasdaq as “LCRX”.
On the weekly chart, wave (I) of ((III)) ended at $113 in July 2024 and wave (II) ended at $56.36 in April 2025, within the move up from October 2022. Above $56.36, price reached $256.68, marked as wave I of (III), and is seen as entering a corrective pullback in wave II.
On the daily chart, waves are labelled: ((1)) $167.15, ((2)) $135.50, ((3)) $251.87, ((4)) $204.57 and ((5)) as I at $256.68. Within ((1)): (1) $108.02, (2) $94.11, (3) $153.69, (4) $131.02, then $167.15; within ((3)): (1) $169.69, (2) $153.60, (3) $236.10, (4) $213.87, (5) $251.87.
The pullback is described as a Zigzag, with ((A)) at $194.08, ((B)) at $241.37 and a projected drop in ((C)). A break below $194.08 (dated 3.09.2026) is used to support a move into $178.47–$139.49 to complete wave II against the April 2025 low.
We see Lam Research in a corrective pullback after peaking at $256.68, even though the overall trend remains bullish. The stock is likely in a final downward wave that should find strong support in the $178.47 to $139.49 area. This zone represents a key buying opportunity for the next major leg higher.
Recent data from industry trackers shows a slight cooling in capital expenditures from major foundries for the second quarter of 2026, as they digest the massive capacity build-out from the previous year. For example, March semiconductor equipment billings saw a modest 3.5% decline month-over-month, the first dip this year, supporting the idea of a near-term consolidation period for suppliers like LRCX. This fundamental backdrop aligns perfectly with the technical expectation for a temporary price drop.
Our immediate focus is on the $194.08 low from earlier this month, set on March 9, 2026. A decisive break below this level will serve as confirmation that the final wave down into our target buying zone is underway. We are not interested in shorting the stock, as that would mean trading against the primary upward trend.
For derivative traders, this setup suggests selling cash-secured puts with strike prices near the upper end of our target range, such as the $175 or $180 strikes, with expirations in late Q2. This strategy allows us to collect premium while defining a clear level at which we would be happy to acquire the stock. The implied volatility from the recent decline makes these premiums more attractive than they were a month ago.
An alternative is to remain patient and wait for the stock to enter the $178.47 – $139.49 zone and show signs of a bottom. Once price action stabilizes, purchasing long-dated call options or setting up bull call spreads would provide leveraged exposure to the anticipated rally. This strategy carries a different risk profile but targets the significant upside we expect once this correction is complete.
Looking back, the powerful rally from the April 2025 low near $56 reminds us of the stock’s long-term strength. That advance followed a significant correction in late 2024, similar to what we anticipate now. History suggests that these pullbacks are healthy and create the best entry points for the subsequent, often powerful, upward trend.
Start trading now – Click here to create your real VT Markets account
