Lamb Weston Holdings, Inc. Price Analysis Powered by AI

Potatoes Under Pressure: LW’s Breakaway Gap Points to a Sell-the-Rip Into the Low 42s

Executive summary

LW closed at $42.80 after a massive breakaway gap down on 12/19 with capitulation volume. Intraday on 12/22, price stayed below session VWAP and printed a fresh post-gap low, signaling supply dominance. Despite deeply oversold momentum (RSI≈14), the structure favors a continuation or a low retest before any durable bounce.
Base case for the next 24 hours: early bounce into resistance (43.3–44.1) fails, followed by another push toward 42.0 and possible probe into the high-41s. Secondary case: a stronger squeeze toward 44.6–45.4 if price reclaims/holds above R1 and the post-gap anchored VWAP band.

Step-by-step, multi-method technical analysis

Daily trend: Strong downtrend accelerated by a breakaway gap on 12/19 (O 50.85, L 43.71, C 43.94) with extreme volume (≈23.4M). 12/22 extended the breakdown (H 44.58, L 42.45, C 42.80), undercutting the gap-day low intraday and closing near the lows. This is classic post-gap continuation behavior.
Short-term structure: After the gap, price is carving a tight, heavy consolidation between ~42.5 and ~44.6. Lower highs intraday and closes below VWAP indicate sellers control the tape.
Overhead supply: The gap left a large vacuum of trapped inventory from ~51–59. Every bounce into mid-40s faces supply from day-traders and funds seeking to reduce risk.

12/19 volume ≈ 23.4M vs recent average ≈ 1–2M: capitulation/”information gap” volume. This often ushers in multi-day trend moves rather than immediate fills.
12/22 intraday VWAP (approx.): ~43.05 (weighted by hourly volumes and typical prices). Close at 42.80 (< VWAP) = bearish day control.
Post-gap anchored VWAP (anchored at 12/19 open): estimate ≈ 45.4 when blending 12/19 and 12/22 volumes/prices. This creates a dynamic resistance band ~45–46. Rejections are likely before reaching it unless a strong squeeze occurs.

RSI(14) daily ≈ 14 (estimated from the last 14 changes). Deeply oversold, but in a breakaway gap regime oversold can persist; it’s a necessary but not sufficient condition for a reversal.
Stochastic oscillators would be <10, reinforcing the oversold state but not yet showing a confirmed bullish cross from low levels.
MACD daily: sharply negative with widening histogram; bears retain momentum. A bullish turn typically lags structural stabilization.
ADX: Likely accelerating above 30, signaling a strong trend phase. Strong-trend conditions diminish the edge of countertrend oscillator buys.

Price is far below short MAs (5/10/20) and well below intermediate MAs (50). A quick approximation puts 20D SMA near the high 50s (pre-gap regime), making the current price ~25–30% below the 20D SMA—an extreme downside displacement typical of post-news repricing.
No bullish MA crossovers in sight; slopes are turning down across the curve.

14D ATR has spiked materially (gap-day range >$7). Expect 24h ranges of ~$2.0–$3.0 while the news shock digests.
Bollinger Bands (20,2): Massive lower-band breach post-gap. While mean reversion odds increase statistically, band-rides are common after breakaway gaps. Any bounce likely stalls at resistance bands first.

Value area concentrated ~42.7–43.3; session POC near 42.9–43.1. Late-day settlement below VWAP and near POC suggests acceptance of lower prices.
Order flow cues: repeated fades from 43.2–43.6 and failure above ~44 indicate sellers are defending rallies.

Immediate resistance: 43.28 (pivot PP), 43.5 (intraday shelf), 43.8–43.9 (Fib 61.8% retrace of 12/22 range; sellers hit here), R1 44.10, intraday spike high 44.58. Above that: 45.4 (post-gap aVWAP), 45.9–46.2 (confluence with earlier typical price), 50.8 (gap-day open).
Immediate support: S1 41.97 (pivot), then 41.1 (S2), psychological 41.0, and 40.0. No strong historical daily supports in the dataset at current levels; round-number levels may matter.
Fibonacci (12/22 H 44.58, L 42.45): 50% = 43.52; 61.8% = 43.84. Price failed to sustain above both on 12/22—bearish tell for next session.

12/19: wide-range bearish candle with little lower shadow—classic breakaway.
12/22: bearish continuation day; lower low, close near the lows. Developing bear-flag characteristics on intraday frames.
No reversal candles (hammer/morning star) yet on daily.

Base case (≈60%): Early rally toward 43.3–43.9 meets selling; rejection around Fib 61.8%/pivot PP leads to a roll-over toward 42.2–42.0 (S1 ~41.97). Intraday low risk extends to 41.5–41.7 before a modest bounce into the close.
Squeeze/repair case (≈25%): Strong gap-up and hold above R1 44.10 with acceptance >44.2 triggers a push to 44.6–45.4 (post-gap aVWAP band). Expect supply to re-assert there unless news changes the narrative.
Upside failure/accelerated downside (≈15%): Immediate break of 42.5 at the open, swift test of 41.9–41.1, possible capitulation wick toward 40.8–40.5 before mean reversion bounce.

Rejection clusters: 43.5–43.9 (Fib 50–61.8, beneath R1), and 44.1–44.6 (R1 to prior intraday high).
Support clusters: 42.0 (S1) and 41.1 (S2).
Anchored VWAP gravity: 45.4 overhang likely caps any first bounce.

In strong-trend, gap-down environments, fading bounces into well-defined resistance tends to offer favorable skew versus bottom-fishing. The optimal short entry is into the 43.6–43.9 supply pocket where risk can be defined above 44.8–45.0 (beyond R1 and beneath aVWAP band).
Profit-taking aligns with S1 41.97 (primary) and runner potential into 41.1 if momentum accelerates.

Expected high: 44.0–44.1 (near R1).
Expected low: 41.5–41.9 (around S1, possibly probing toward S2 if momentum increases).
Expected close: 42.2–42.6 (after an intraday low retest and modest late bounce).

Bottom line

Structure, volume, VWAP dynamics, and momentum all favor selling strength while respecting the possibility of a reflex pop. With current price at $42.80, the highest-odds tactical entry is a patient short into 43.6–43.9, targeting ~42.0 initially.