Struggling Lam Research Stock Could Face More Losses

Shares of Lam Research Corp (NASDAQ:LRCX) are down 2.2% to trade at $233.89, as the chipmaker struggles to bounce back from its post-earnings selloff. Lam Research reported earnings Oct. 21 but still finds itself trading near seven-month lows. The shares are already 46.6% off their June 30 record high of $438.50, though a bear signal is now flashing on the charts.

LRCX sports a 10-day call/put volume ratio of 1.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 92% of readings from the past year. There have been six instances in the last three years that the equity's 10-day buy-to-open call/put ratio crossed over 1.0 and moved into the 90th percentile.

Per Schaeffer's Senior Quantitative Analyst Rocky White, LRCX was higher one month later 33% of the time after these signals, averaging a 6.4% loss. A move of similar magnitude would push the stock further below its April lows near $218.92.

Echoing this, the equity’s Schaeffer's put/call open interest ratio (SOIR) of 1.05 ranks higher than just 18% of readings from the past year. Should this bullish attention begin to unwind, it could trigger additional headwinds.