In This Article:
Key Takeaways
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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.
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The stock closed above the respected 50-day moving average on Friday on the highest trading volume in over a week.
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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.