This column originally appeared Friday on Real Money, our premium site for active traders. Click here to get great columns like this from Jim Cramer and other writers even earlier in the trading day.
We wrote about LRCX in January and prices have quickly overshot our price target: "In this long-term Point and Figure chart of LRCX... we can see the enduring uptrend on this company. The next price objective derived from this charting technique is $120."
The rally is not tiring so an update seems appropriate today. New price targets and risk levels.
In this daily bar chart of LRCX, above, we can see how the rally turned vertical last month with a gap and stronger volume. The slope of both the 50-day and the 200-day moving averages remain positive. The daily On-Balance-Volume (OBV) line has climbed with the price action the past 12 months, telling us that the bullish traders support the advance with heavier volume on up days.
The Moving Average Convergence Divergence (MACD) oscillator has been above the zero all year. Recently, the MACD oscillator crossed to a take profits sell signal but it could soon turn back up again.
In this weekly chart of LRCX, above, the price action looks like a parabolic rally. Prices could have a "blow off" to much higher levels or we could see a high level consolidation. The 40-week moving average line is bullish as is the weekly OBV line. The weekly MACD oscillator is still rising above the zero line.
In this Point and Figure chart of LRCX, above, we can see the rally -- awesome! The next price objective is $163+. We could also suggest the $240 level is possible if prices make a triple from the consolidation pattern on the weekly bar chart.
Bottom line: Consider raising you sell stop orders to a close below $140. Targets start at $163 and go up from there.
Employees of TheStreet are restricted from trading individual securities.