Key Takeaways
- Supermicro shares are likely to remain in the spotlight to start the week after jumping more than 10% Friday to log their best one-day performance since early December.
- The stock closed above the respected 50-day moving average on Friday on the highest trading volume in over a week.
- 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 (SMCI) shares are likely to remain in the spotlight to start the week after jumping more than 10% Friday to snap a five-session losing streak and log their best one-day performance since early December.
Supermicro is looking to move past a volatile 2024 in which accounting and corporate governance issues led to several delayed financial reports. However, CEO Charles Liang said last month that postponed filings will be completed by a Feb. 25 deadline issued by the Nasdaq, easing concerns about a potential delisting.
Sentiment may have also received a boost after Microsoft (MSFT) announced Friday that it plans to spend about $80 billion this fiscal year on data centers that power artificial intelligence (AI), a move that could benefit the server maker through increased partnerships and hardware sales.
Supermicro shares ended last year with a 7% gain, but surged more than four-fold between January and March before slumping as much as 85% from their record high.
Below, we break down the technicals on Supermicro’s chart and identify key price levels worth watching out for.
Stock Reclaims 50-Day Moving Average
Since mid-July, Supermicro shares have oscillated within an orderly descending broadening formation, with the stock tagging both the pattern’s upper and lower trendline on several occasions since that time.
More recently, the price has traded in a narrow range since mid-December but closed above the 50-day moving average (MA) on Friday on the highest trading volume in over a week.
Let’s take a closer look at key support and resistance levels on Supermicro’s chart that investors may be eyeing.
Key Support Levels to Monitor
The bulls’ inability to hold the 50-day MA could initially lead to a retest of the $26 level. Investors may look for entry points in this location near the high of a brief countertrend rally in early November.
A decisive breakdown below this level may see Supermicro shares drop to around $18, an area about 46% below Friday’s closing price where they would likely encounter significant support near the prominent November swing low.
Crucial Resistance Levels to Watch
Follow-through buying this week could propel a move up to the $39 level, an area currently just below the broadening formation’s upper trendline. The shares may run into selling pressure in this region near two key troughs that formed on the chart in September.
Further upside could see the shares climb to around $50, where they may encounter resistance near a trendline that connects a range of comparable price points on the chart from the early-August trough to December peak.
Finally, a more bullish move could drive a move to the $63 level. Investors who have purchased the stock at lower prices may look for profit-taking opportunities around the August swing high, which currently sits in close proximity to the downward sloping 200-day MA.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above securities.
