LAM RESEARCH CORP is a falling knife that can bleed you if you catch it today. It delivered -2.44% to close at 135.37. It's recent 5 day performance has been +0.22%, +0.12%, +0.34%, -0.15% and -5.28%.
LRCX showed a strong bearish trend over the last 3 months. During this period LRCX delivered -11.0% and saw a maximum drawdown of -15.93%. There were 2 short signals during this period that returned a cumulative of +2.08% to investors.
LRCX has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 11 Feb, 2016 to 12 Mar, 2018. Over the last 2 years 11 months and 10 days, LRCX outperformed the SP500 index on 56% days.
During the last three months LRCX was mostly loss making and delivered on average -0.16% per day. It's best return during this period (of +7.15%) was on Thursday, 1 Nov, 2018. While it's worst loss in the same period (of -7.04%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 4 Oct, 2018 and ended on 11 Oct, 2018. This bearish trend lost -9.95% of investor capital.
The last 12 months saw LRCX's investors making profits in 6 months and incurring losses in 6 months. LRCX was less consistent in delivering monthly returs than SP500 index. LRCX was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -13.76% compared to -7.28% returned by SP500 index in Oct 2018. LRCX had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both LRCX and SP500 index significantly outperform during months when quarterly/annual results are announced.
I'm a great believer in luck, and I find the harder I work the more I have of it.
-- Thomas Jefferson
LRCX is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in LRCX's volatility from 17 Sep, 2018 to 20 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that LRCX has significant positive skewness in it's return distribution. This indicates that investors can expect LRCX to recover from drawdowns quickly. Which makes LRCX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in LRCX derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.
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