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Shares of Super Micro Computer moved higher in premarket trading on Tuesday after plunging yesterday on news that the stock will be delisted from the Nasdaq 100 Index and reports that the company is exploring ways to raise capital.
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The stock initially came under selling pressure last week after nearly doubling from last month’s low to plug a gap from late October.
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Investors should keep an eye on key support levels on Supermicro’s chart around $26 and $18, while they should also keep an eye on crucial resistance levels around $39 and $50.
Supermicrocomputer (SMCI) shares moved higher in premarket trading on Tuesday after falling yesterday on news that the stock will be delisted from the Nasdaq 100 Index and reports that the embattled server maker is exploring ways to raise capital.
The stock has had a volatile year, rising to a high of $119 in March on artificial intelligence (AI)-driven demand before plummeting to around $18 in mid-November on fears of a possible delisting from Nasdaq after accounting discrepancies led to delayed financial reporting.
Over the past month, Supermicro’s shares have recovered 80% after the company hired a new accountant and was granted a filing extension until Feb. 25, but they have lost nearly a quarter of their value in the last five trading sessions as investors assessed the company’s prospects.
The stock rose 2% to around $34 in recent premarket trading.
Below, we take a closer look at Supermicro’s chart and apply technical analysis to identify key price levels worth paying attention to.
Microcomputer stocks initially came under selling pressure last week after nearly doubling from last month’s lows to plug a gap from late October.
More recently, selling has intensified, with the share price reaching a decisive closing price below its 50-day moving average on Monday. The relative strength index (RSI) confirms the weakening price momentum, with the indicator showing a value below 50 for the first time since late November.
Let’s point out key support and resistance levels that could pique investor interest.
Continued selling could see Supermicro shares fall to around $26, a level on the chart where they could encounter support near a countertrend peak during the stock’s sell-off in early November.
A breakdown below this level opens the door for a retest of the $18 level. This location on the chart would likely attract buying interest near last month’s prominent swing low, especially if other indicators simultaneously point to oversold conditions in the stock.
After recovering from current levels, investors should watch how the stock reacts to the $39 area, a region where the stock could come under selling pressure near two lows that formed on the chart in September.
Finally, a more bullish move could see shares rise to around $50. Investors who bought into the recent dip could start selling shares near a horizontal line connecting the early August low to the high of a consolidation period that appeared on the chart for most of October within the broader downtrend of the share.
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