Key Takeaways
- Supermicro shares are likely to remain in focus to start the week after the stock led the S&P 500 higher Friday following bullish remarks from analysts at JPMoprgan.
- The price has found buyers on a pullback towards the neckline of inverse head-and-shoulders pattern, bringing the RSI above the 50 threshold and possibly setting up another move higher.
- Investors should watch crucial support levels on Supermicro's chart around $35 and $26, while also monitoring key resistance levels near $66 and $97.
Super Micro Computer (SMCI) shares are likely to remain in focus to start the week after the stock led the S&P 500 higher Friday following bullish remarks from analysts.
JPMorgan upgraded shares, pointing out the possibility that the demand for AI infrastructure could increase, especially its hardware, which houses Nvidia’s (NVDA), sought-after Blackwell chip as shipments ramp up.
Supermicro shares are up nearly 40% from the beginning of the year to Friday’s closing price as investors ignore the highly publicized accounting issues and corporate governance problems that have been weighing on the stock in the past six month.
Last month the server maker filed delayed reports to avoid delisting from Nasdaq and predicted significant growth in revenue by 2026, as demand for infrastructure to support AI grows.
Below, we look at Supermicro’s technicals and identify key price levels that are worth keeping an eye on.
Retest of the Inverse Head, Shoulders and Neckline
Supermicro shares formed a head and shoulders formation between August and February, before breaking out above its neckline last month on heavy trading volumes.
Recently, the stock has seen a surge in buying interest after a pullback from the initial breakout, bringing the relative strength index back above the 50 threshold and possibly setting up another upward move.
Apply technical analysis to Supermicro chart to identify key support and resistance level that investors may be looking at.
Keep an eye on the Support Levels Crucial
Supermicro shares jumped nearly 8% Friday to end the week at $42.15.
The first support level to be on the lookout for is around $35. This area could see a lot of buying interest near the inverse neckline of the head and shoulders, which is closely aligned with the August 2023 peak.
A breakdown below the important level could see the shares returning to the lower support of $26. Investors might look for opportunities to buy in this area near last month’s lowest price, which sits alongside the upwards sloping moving average of the 200-week chart and a series similar price points during the second half.
Key Resistance Levels Monitor
The current price could propel a move upwards to around $66, an area on the chart that may see the shares run into overhead resistance near last year’s April low and the peak in February.
If bulls take control of price action, then look for a possible rise to the $97 mark. Investors may decide that they want to lock in their profits near the top of the trendline in a narrow trading area that developed on a chart shortly after the stock had reached its record high at the beginning of March last year.
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