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Shares of Super Micro Computer continued to fall in extended trading after posting the biggest declines on the Nasdaq on Wednesday following news that the embattled server maker would delay the filing of its quarterly results.
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The stock’s sell-off has continued after landing on above-average volume under a falling, widening wedge pattern late last month.
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Investors should keep an eye on key support levels on the Super Micro chart around $17 and $12, while they should keep an eye on key resistance levels around $23 and $30.
Supermicrocomputer (SMCI) shares continued to fall in extended trading after the Nasdaq led Wednesday on news that the embattled server maker would delay the filing of its first-quarter financial report.
The latest update comes after the company said in October that it could not predict when it would file its 2004 annual report, a requirement it must meet to comply with Nasdaq listing rules. The delays in the company’s reporting follow the resignation last month of accountant Ernst Young, who previously exposed problems with the server maker’s corporate governance and internal controls.
Super Micro shares have lost more than half their value since late October through Wednesday’s close and are down about 28% since the start of the year. The stock fell 6% during the regular session Wednesday and tumbled another 6% to around $19 in after-hours trading.
Below we provide an overview of the technical features of the Super Micro chart and identify important price levels to pay attention to.
Super Micro shares traded within an eight-month bear-widening formation before finally falling below the pattern’s lower trendline on above-average volume late last month.
More recently, the stock’s sell-off has continued, with the relative strength index (RSI) dipping below the 30 threshold, confirming bearish price momentum. However, the oversold value of the indicator also increases the chance of a recovery in bargain hunting.
Let’s point out key support and resistance levels on Super Micro’s chart that investors may be watching.
Amid further declines, investors should keep an eye on how the stock reacts to the $17 level, a location on the chart where the price could find support near a range of similar trading levels before the late May 2023 breakaway gap.
If the bull fails to defend this level, shares could fall to lower support around $12. Investors can look for buy-and-hold entries in the area near the three peaks that formed on the chart between March and April last year.
