Straight Up, No Chaser: Supermicro's Stock Plunge and Crucial Price Levels
Monitor These Supermicro Stock Price Indicators as Stock Dives Following Disappointing Results
Super Micro Computer (SMCI) shares plummeted in extended trading on Tuesday following disappointing preliminary financial results, sparking concerns of an industry-wide slowdown due to uncertainties surrounding Trump administration's tariffs. Let's dive into the stock's technical analysis, zeroing in on key price levels you should be eyeing.
Ascending Channel in Play
Since October last year, Supermicro shares have been treading an ascending channel, touching the pattern's upper and lower trendlines multiple times. However, its recent rally from the channel's lower trendline has yet to breach the 50- and 200-day moving averages, suggesting a longer-term downtrend.
Support Levels to Watch
Two crucial support levels to keep tabs on are:
- Approx. $28: This region, close to the ascending channel's lower trendline, may pique buying interest around the April and February swing lows, as well as a minor countertrend high during the stock's steep sell-off in early November last year.
- $17: Bargain hunters may see this area, just below a projected downside target, as an opportunity to buy. Interestingly, this level also aligns with Supermicro's 52-week low, indicating a historically strong support.
Resistance Levels to Milk
As for potential upswings, keep an eye on:
- $50: This level could be of interest, particularly to those holding shares at lower prices, who might look to lock in profits around last year's early-August trough.
- $63: A stronger move could push Supermicro shares towards this range, where resistance might come from a horizontal line connecting notable swing highs.
Keep in mind, the price action and technical analysis presented here are for informational purposes only and should not be relied on as investment advice. As always, do your own research
Disclaimer: At the time of writing, the author does not hold any of the mentioned securities.
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- The disappointing preliminary financial results of Super Micro Computer (SMCI) have led to a significant drop in its shares in extended trading, raising concerns about an industry-wide slowdown caused by uncertainties about the Trump administration's tariffs.
- Since October last year, Supermicro shares have been moving within an ascending channel, yet they have not managed to surpass the 50- and 200-day moving averages, hinting at a prolonged downtrend.
- There are two important support levels that investors should monitor: approximately $28, which coincides with the ascending channel's lower trendline, potential buying interest points around key swing lows, and Supermicro's 52-week low, and $17, a historically strong support level and a potential buying opportunity.
- If the price action favors potential upswings, investors should pay attention to $50, a level of interest for those holding shares at lower prices, and $63, where resistance may come from a horizontal line connecting significant swing highs.
- Although the presented price action and technical analysis should not be considered investment advice, investors are advised to do their own research.
- As the author does not hold any of the mentioned securities at the time of writing, interested investors may consider visiting our website or trading with Pepperstone.
