Yahoo Finance

Key Takeaways

• Supermicro shares plummeted 15% in extended trading on Tuesday after the server maker posted preliminary quarterly results that came in well below its prior guidance.

• The stock has oscillated within an ascending channel since October last year, tagging the pattern’s upper and lower trendlines on several occasion over that time.

• Investors should monitor support levels on Supermicro's chart around $28 and $17, while also watching resistance levels near $50 and $63.

Super Micro Computer (SMCI) shares plummeted in extended trading on Tuesday after the server maker posted preliminary results for its fiscal third quarter that came in well below its prior guidance.

The company tied the downward revision to delayed consumer product decisions that pushed sales into the current quarter, amplifying broader concerns of a slowdown in spending amid uncertainty over the Trump administration’s sweeping tariffs.

Supermicro shares fell 15% to $30.60 in after-hours trading Tuesday.

Prior to today’s after-hours drop, Supermicro shares had gained 18% so far this year. The stock has, however, seen significant price swings as investors assess recent challenges relating to the company's accounting and corporate governance practices amid a clouded demand outlook for AI infrastructure, such as servers used in data centers.

Below, we take a closer look at Supermicro’s chart and use technical analysis to identify crucial price levels worth monitoring.

Ascending Channel in Play

Supermicro shares have oscillated within an ascending channel since October last year, tagging the pattern’s upper and lower trendlines on several occasion over that time.

More recently, the stock has rallied from the channel’s lower trendline, though the price has remained below the respected 50- and 200-day moving averages to indicate a longer-term downtrend.

With Wednesday’s projected drop back toward the ascending channel's lower trendline, let’s identify two crucial support levels worth monitoring and also point out resistance levels to watch during potential upswings.

Support Levels Worth Monitoring

The first support level to monitor sits at $28. This area on the chart, just below the ascending channel’s lower trendline, may attract buying interest near the April and February swing lows, which also closely align with a minor countertrend high during the stock’s sharp sell-off in early November last year.

The bulls’ inability to successfully defend this important technical level opens the door for a larger decline to around $17. Bargain hunters may seek entry points in this area near November's prominent V-shaped swing low. Interestingly, this location also sits just below a projected downside target that takes the stock's prior move lower within the ascending channel and repositions it from this week's high, predicting how a new trend lower may look if price action rhymes.