Buy Lam Research And Sell Short Gilead

The market cycles are in a bottoming phase. However, October is the most volatile month, has brought the largest one-day declines, but has usually closed on the upside. Bullish sentiment was only partially doused by the correction. This month and the quarter are likely to close out on the upside but a large short-term decline cannot be ruled out.

Here are two stock recommendations for the short term.

Lam Research is entering a cycle buy phase. The daily cycle turns up on the 6th and tops on October 15th. Seven of the last eight cycles have been profitable over the last year. The weekly cycle (87% profitable) and the monthly cycle (80% correct) are also rising. Seasonality is supportive of higher prices. The stock has risen in the month of October 64% of the time, the strongest month in any year.  The short-term target is $340.

Chart 1

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Chart 3 shows that the daily Gilead cycle tops on the 5th; a point to sell the stock short. I would cover the trade on October 15th. Eight of nine signals have been profitable in the last year. The weekly cycle (90% accurate) is also falling. The $58-$60 level is likely to be reached. Relative strength continues to hit new lows.

Chart 3

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