Super Micro Computer Price Levels to Watch as Stock Plunges After Business Update

Shares in Super Micro Computer (SMCI) tumbled in extended trading Tuesday after the troubled server maker provided preliminary fiscal first-quarter results that came in below Wall Street expectations and said it’s unable to predict when it will file its delayed 2024 annual report.

Tuesday’s updates follow a turbulent period for the company, which last week saw its shares plunge around 45% after its auditor, Big Four accounting firm EY, resigned. That move came as speculation continues to mount over corporate governance challenges facing Super Micro amid allegations of accounting abnormalities

Super Micro Computer shares fell 16% to $23.30 in after-hours trading Tuesday. The stock, once an up-and-coming artificial intelligence (AI) favorite that hit a high around $123 in March, was down slightly year-to-date through Tuesday’s close.

Below, we take a closer look at the technicals on Super Micro Computer’s weekly chart and point out major price levels to watch out for. 

Falling Wedge Breakdown

After trading within a six-month falling wedge, Super Micro Computer shares broke down below the pattern late last month.

Importantly, the move occurred on the highest weekly volume since late August, suggesting strong selling conviction among larger market participants, such as institutional investors and hedge funds.

Despite an early-November bounce, the stock sits poised to test lower levels again on Wednesday following the company’s latest updates.

Let’s identify several crucial support levels and a key resistance area on Super Micro’s chart that investors may be watching.

Crucial Support Levels to Watch

Firstly, it’s 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 linking the lower level of a period of consolidation in the stock between May and October last year.

A decisive breakdown below this level opens the door for a move down to around $12, where the shares could attract buying interest near a series of highs in March and April last year that formed as part of the stock’s impulsive move higher from January to July.

Further selling could see the stock revisit lower support near $10, an area around 64% below Tuesday’s closing price where buy-and-hold investors may seek entries around a range of comparable trading levels that formed on the chart between November 2022 and April last year.

Key Resistance Area to Monitor

Upon an upswing, investors should monitor the $30 area. Investors who have purchased the stock at lower levels may look to lock in profits near a trendline that connects the top of a prior trading range on the chart from August 2023 to early January this year.

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As of the date this article was written, the author does not own any of the above securities.