What you need to know
- Supermicro will be in the spotlight for the start of this week following a Friday jump that saw the shares rise by more than 10 percent, their highest one-day gain since early December.
- Stock closed Friday above respected 50-day moving median on highest trading volume since over a month.
- Investors should monitor key support levels on Supermicro's chart around $26 and $18, while also watching crucial resistance levels near $39, $50, and $63.
Super Micro Computer shares (SMCI), which jumped more than 10 percent on Friday, are expected to be in the spotlight for the start of the week. They broke a losing streak that spanned five sessions and had their best performance one day since December.
Supermicro wants to get past the volatile year 2024, when accounting and corporate governance problems led to several financial reports being delayed. Charles Liang stated last month that the Nasdaq had set a deadline of Feb. 25, which would allow for all delayed filings to be made. This eased concerns over a possible delisting.
Microsoft’s (MSFT) announcement on Friday of its plans to invest about 80 billion dollars in data centers for artificial intelligence (AI) could have also boosted the mood. This move would benefit Microsoft through more partnerships and increased hardware sales.
Supermicro shares closed last year at a gain of 7%. However, they surged by more than 4 times from January to March. They then fell as much as 85% off their previous high.
Here, we analyze the chart of Supermicro and determine key levels in price.
Stock Reclaims Moving Average of 50 Days
Supermicro’s shares oscillated in an orderly, descending, broadening pattern since mid-July. The stock has tagged both the upper and lower trendlines of the pattern on multiple occasions.
The price of the stock has been trading in a tight range since December, but it closed Friday above the moving average 50 days (MA), with the largest volume traded in more than a week.
We’ll take a closer at some of the levels that may have investors’ attention on Supermicro chart.
Monitoring Key Support Levels
If the bulls fail to maintain their 50-day MA, they could retest $26 at first. Investors can look at entry points near the peak of an early-November countertrend rally.
Supermicro’s shares could drop as low as $18 if they are unable to maintain this price. This is 46% less than Friday’s close, and would be likely to find significant support at the November swing-low.
Important Resistance Levels To Watch
The continuation of the buying spree this week may propel the stock to $39, which is just beneath the trendline above the widening formation. In this area, the shares could face selling pressure as they are near to two important troughs formed on September’s chart.
The shares could climb even higher, reaching around $50. However, they might encounter some resistance at a line that links a number of similar price points from early August’s low to the peak in December.
Finaly, a bullish trend could push the stock to a level of $63 or higher. Investors, who purchased the stock below the current price may seek to profit from the recent swing high in August. This is currently located close to the 200-day MA that slopes downward.
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