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 buying interest on a pullback to the neckline of an inverse head and shoulders pattern, lifting the RSI back above the 50 threshold in the process and potentially setting the stage for 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 the stock, pointing out that shares in the server maker could receive a boost from increasing demand for AI infrastructure, particularly its hardware that houses Nvidia’s (NVDA) sought-after Blackwell chips as shipments ramp up.
Supermicro shares have gained nearly 40% since the start of the year through Friday’s close as investors look past highly publicized accounting and corporate governance challenges that have weighed on the company’s stock over the past six months.
Last month, the server maker filed delayed financial reports to avoid a Nasdaq delisting and predicted significant revenue growth in 2026 as demand grows for infrastructure to support AI.
Below, we take a closer look at the technicals on Supermicro’s weekly chart and point out crucial price levels worth watching out for.
Inverse Head and Shoulders Neckline Retest
Supermicro shares carved out an inverse head and shoulders pattern between August and February before breaking out above the formation’s neckline on heavy trading volume last month.
More recently, the stock found buying interest on a pullback to the initial breakout point, lifting the relative strength index (RSI) back above the 50 threshold in the process and potentially setting the stage for another move higher.
Let’s apply technical analysis to Supermicro’s chart to identify crucial support and resistance levels that investors may be watching.
Crucial Support Levels to Watch
Supermicro shares surged nearly 8% on Friday to finish the week at $42.15.
The first lower support level to watch sits around $35. The shares could find buying interest in this area near the inverse head and shoulders’ neckline, which closely aligns with the prominent August 2023 peak.
A breakdown below this important location could see the shares revisit lower support at the $26 level. Investors may seek buying opportunities in this region near last month’s low, which currently sits alongside the upward sloping 200-week moving average and a series of similar price points on the chart during the second half of 2023.
Key Resistance Levels to Monitor
Buying from current levels could fuel a move up to around $66, a location on the chart where the shares may run into overhead resistance near the February peak and last year’s April trough.
Finally, If bulls regain control of the price action, look for a possible rally to the $97 level. Investors who bought lower may decide to lock in profits near the top trendline of a narrow trading range that developed on the chart shortly after the stock set its record high in early March last year.
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As of the date this article was written, the author does not own any of the above securities.