Super Micro Computer Shares Rebound After Nasdaq Removal
Super Micro Computer (SMCI) shares moved higher in premarket trading on Tuesday after tumbling yesterday following news that the stock will be removed from the Nasdaq 100 Index and reports that the embattled server maker is exploring ways to raise capital. The stock initially ran into selling pressure last week after rallying nearly two-fold from last month’s low to fill a late October gap.
The shares have had a volatile year, rising to a closing high of $119 in March on the back of artificial intelligence (AI)-driven demand before plummeting in mid-November to around $18 following fears of a potential Nasdaq delisting after accounting anomalies led to delayed financial reporting.
Despite recent challenges, Supermicro’s shares have made a strong recovery, gaining 80% over the past month after the company hired a new auditor and secured a filing extension until February 25. However, the stock has lost nearly a quarter of its value in the last five trading sessions as investors assess the company’s outlook.
The stock is currently up 2% at around $34 in recent premarket trading.
Analyzing Supermicro’s Chart
Super Micro Computer shares initially encountered selling pressure last week after rallying significantly from the previous month’s low to fill a late October gap. More recently, selling pressure intensified, resulting in a decisive close below the 50-day moving average on Monday. The relative strength index (RSI) also indicates weakening price momentum, with a reading below 50 for the first time since late November.
It is important to note the major support and resistance levels that may attract investors’ interest.
Key Support Levels to Monitor
If selling pressure continues, Supermicro shares could fall to around $26, where they may find support near a countertrend peak seen during the stock’s early-November sell-off. A breakdown below this level could see a retest of the $18 level, attracting buying interest near last month’s prominent swing low, especially if other indicators signal oversold conditions.
Crucial Resistance Levels to Watch
Upon a potential recovery, investors should observe how the stock reacts to the $39 area, where selling pressure may occur near two troughs that formed on the chart during September. A more bullish scenario could see the shares climb to around $50, with investors who bought the recent dip potentially looking to sell near a horizontal line that links the early August trough with the upper level of a consolidation period witnessed in October.
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Source : www.investopedia.com