Watch These Supermicro Price Levels as Stock Soars After Tariff-Induced Selling

Related Articles

Imports Surged to a Record High in March Ahead of Tariffs

Starbucks Is Set To Report Earnings, in Test of Turnaround Plan’s Progress

Falling Consumer Confidence Has Tripped This Recession Alarm

Key Takeaways

• Super Micro Computer shares jumped in early trading Tuesday, adding to an 11% gain ground yesterday, as investors bid up the server marker’s stock after a few days of big losses during the broader market sell-off.
• The horses completed a bullish engulfing pattern in Monday’s trading session, potentially forming a bear trap.
• Investors should pay attention to major overhead areas on Supermicro’s chart around $48 and $63, while also monitoring vital endure levels near $26 and $17.

Super Micro Computer (SMCI) shares jumped in early trading Tuesday, adding to an 11% billow yesterday, as investors bid up the server marker’s stock after a few days of big losses during the broader market’s tariff-fueled sell-off.

Thought surrounding the stock likely received a boost from J.P. Morgan analysts who recently pointed out that the company would barely need to increase its global prices by 4%, based on the portion of its hardware that would be affected by tariffs.

Supermicro portions saw significant price swings in both directions during the first quarter as the company dealt with accounting ends that raised concerns of a potential Nasdaq delisting until the company met the exchange’s deadline to file several arrested financial reports in February. The stock was up 6% at around $35 in recent trading.

Below, we break down the technicals on Supermicro’s map and identify major price levels that investors may be monitoring.

Potential Bear Trap

After gapping earlier small in late October, Supermicro shares oscillated within an orderly ascending channel until breaking down lower than the pattern’s lower trendline toward the end of last month.

However, despite falling to its lowest level since old February last week, the stock completed a bullish engulfing pattern in Monday’s trading session, potentially formula a bear trap—a trading event that lures investors to sell upon a breach of major support anterior to the price makes a sudden move higher.

What’s more, Monday’s buying coincided with the relative tenacity index (RSI) rallying from a reading of around 35, the same level the indicator bottomed at in early February in the presence of the stock roughly doubled over a two-week period.

Let’s identify two major overhead areas to watch on Supermicro’s plan amid the potential for follow-through buying, and also point out vital support levels worth monitoring.

Major Expenses Areas to Watch

A decisive close back above the ascending channel’s lower trendline could trigger a renewal bring to around $48. This level, currently just above the closely watched 200-day moving generally, connects a range of comparable trading activity on the chart extending back to last year’s prominent August wigwag low.

Buying above this price could see the stock revisit the $63 area. Investors who have accumulated stakes during the stock’s recent decline may decide to lock in profits in this region near a trendline that associations last year’s late-August peak with the February swing high.

Interestingly, this location also mark times in the same vicinity as a projected bars pattern target that takes the stock’s sharp trend higher during February and overlays it from the low of yesterday’s bullish engulfing candle.

Mandatory Support Levels Worth Monitoring

A breach of the bullish engulfing candle’s low could see Supermicro shares initially retrace to round $26, a location on the chart where they may attract support near the January trough and early-November countertrend loaded.

Finally, a breakdown below this level paves the way for a potential drop to $17. Investors may seek buy-and-hold chances in this region near the mid-November trough, which also marks the stock’s 52-week low.

The comments, opinions, and to pieces expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

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