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Shares of Super Micro Computer fell in extended trading on Tuesday after the troubled server maker reported preliminary results that missed expectations and said it could not predict when it will file its delayed annual report.
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The stock fell below a falling wedge pattern late last month on the highest weekly volume since late August, suggesting selling conviction was behind the move.
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Investors should pay attention to crucial support levels on Super Micro Computer’s chart around $23, $12, and $10, while keeping an eye on a key resistance area near $30.
Shares in Super Micro Computer (SMCI) tumbled in extended trading on Tuesday after the troubled server maker provided preliminary fiscal first-quarter results that were below Wall Street expectations and said it cannot predict when it will file its delayed 2024 annual report.
Tuesday’s updates follow a turbulent period for the company, which saw its shares fall about 45% last week after its auditor, Big Four accounting firm EY, resigned. The move came as speculation continued to mount over the corporate governance challenges facing Super Micro amid allegations of accounting misstatements
Shares of Super Micro Computer fell 16% to $23.30 in after-hours trading on Tuesday. The stock, once a rising favorite in the artificial intelligence (AI) space that peaked around $123 in March, had fallen slightly year to date through Tuesday’s close.
Below we take a closer look at the technical data on Super Micro Computer’s weekly chart and point out the key price levels to pay attention to.
After trading within a six-month bearish wedge, shares of Super Micro Computer fell below the pattern late last month.
Importantly, the move occurred on the highest weekly volume since late August, indicating strong selling conviction among larger market participants, such as institutional investors and hedge funds.
Despite a rebound in early November, the stock is poised to test lower levels again on Wednesday following the company’s latest updates.
Let’s identify some crucial support levels and a key resistance area on the Super Micro chart that investors may be looking at.
Firstly, it is worth keeping an eye on the $23 level. This key location on the chart finds a confluence of support near the 200-week moving average and a trendline connecting the lower level of a period of consolidation in stocks between May and October of last year.
A decisive breakout below this level opens the door for a decline to around $12, where the shares could attract buying interest near a series of highs in March and April last year that were part of the stock’s impulsive January-to-July surge .
