What you need to know
- Super Micro Computer’s shares rose in Tuesday morning premarket trade after falling yesterday. This was due to news of the removal from the Nasdaq 100 Index, and that reports indicated that the company may be looking for ways to raise additional capital.
- Last week, the stock was initially under selling pressure after it had nearly doubled from its low of last month to close a gap in late October.
- Investors should watch major support levels on Supermicro's chart around $26 and $18, while also monitoring crucial resistance levels near $39 and $50.
Super Micro Computer shares rose in Tuesday’s premarket after falling yesterday on news the company would be dropped from the Nasdaq 100 Index. There were also reports the server manufacturer was looking for ways to raise money.
Stocks have had an extremely volatile year. They rose to $119 on March’s closing price, driven by artificial intelligence. However, they plummeted to $18 in November due to fears that Nasdaq could delist the stock after delayed financial reports caused accounting errors.
Supermicro shares gained 80% in the past 30 days after hiring a new auditor. The company also secured an extension of the filing deadline until the 25th. But they lost nearly 25% over the last 5 trading sessions, as investors assessed the company’s prospects.
In recent premarket trades, the stock rose 2% to $34.
Here, we examine Supermicro’s chart closely and then apply technical analysis in order to pinpoint important price levels worth keeping an eye on.
Fill October Gap
Last week, after almost doubling from the October lows to cover a large gap left by last month’s rally, shares of microcomputers were initially under pressure.
Recently, there has been an increase in selling, as the stock price closed Monday’s session decisively under the 50-day average. Relative strength index (RSI), a measure of the price’s momentum, confirms the weakening trend. For the first time in late November, the indicator has dipped below 50.
Investors may be interested in important levels of support and resistance.
The Major Support Levels To Watch
Supermicro’s shares could fall as low as $26, where, on the graph, they might find support at a peak that was a counter-trend during its early November sell-off.
If this level is broken, a return to the $18 mark will be possible. The chart location would attract buyers near the prominent swing low of last month, especially if there are other indicators that indicate oversold conditions.
Important Resistance Levels Monitor
Investors should monitor the reaction of the stock to the area around $39, where it is possible that the share price will be under pressure due to two lows on the chart in September.
Finaly, the share price could rise up to about $50. Investors that bought shares during the recent drop may be looking to unload them near the horizontal line linking the early-August trough and the uppermost level of a period of consolidation that was visible on the chart through most of October.
The opinions and comments expressed by Investopedia on this site are solely for informational use. Read our warranty and liability disclaimer for more info.
The author of this article does not currently own any securities listed above.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
