Supermicro shares jumped nearly 30% on Monday after an independent review found no wrongdoing in its accounting practices. The news boosted the stock’s price and has investors watching key overhead areas, including $50, $64, and $97.
The stock had fallen by 86% from its peak in early March but has since more than doubled from its low last month. Supermicro filed a compliance plan with the Nasdaq and announced a new auditor, which has helped alleviate concerns of a potential delisting. The company expects to file its delayed financial results soon.
On the technical chart, Supermicro shares have formed a descending broadening formation since their peak in March. Above-average trading volumes have supported the move higher, indicating buying participation from institutional investors. However, investors should watch for key overhead areas and major support levels, including $50, $64, $97, $30, and $23.
Investors can expect resistance near the $50 level, which could provide a psychological boost with its proximity to the early-August trough and late-October peak. A decisive close above this level could see shares climb to around $64. Further positive price action may fuel a rally up to the $97 area, where investors should look for exit points.
In contrast, a pullback to the $30 level could provide buying opportunities near the top trendline of a five-month consolidation period. A more significant drop could see shares retrace to the $23 level, which would likely provide support near the lower trendline of the consolidation period.
Source: https://www.investopedia.com/supermicro-stock-price-levels-to-watch-after-near-30-surge-8754248