Watch These Supermicro Price Levels as Stock Continues to Soar

Super Micro Computer (SMCI) shares will remain on watchlists after surging more than 16% on Tuesday, extending an impressive rally that followed the server maker’s upbeat business update last week. 

Investors bid the stock up for a fourth consecutive trading session on Tuesday after the company guided significant revenue growth in fiscal 2026 during the update, as demand grows for artificial intelligence (AI) infrastructure.

Buying enthusiasm has also been bolstered after the company said during the same update that it expects to submit its delayed fiscal 2024 financial reports by the Nasdaq’s Feb. 25 deadline to avoid being delisted from the exchange.

Since last week’s update, Supermicro shares have soared 45%, but still trade down 30% over the past twelve months as of Tuesday’s close following a number of high-profile accounting and corporate governance issues. The stock rose 16.5% to close at $55.80 on Tuesday.

Below, we take a closer look at Supermicro’s chart and apply technical analysis to point out crucial price levels worth watching out for.

Falling Wedge Breakout Signals Continuation Move

Supermicro shares broke out from a falling wedge pattern earlier this month, signaling a continuation move higher. Indeed, the stock has seen follow-through buying on above-average volume, with gains accelerating in recent trading sessions.

While the relative strength index (RSI) confirms bullish momentum with a reading above the 70 threshold, it also warns of overbought conditions, potentially leading to short-term profit-taking.

Let’s identify two crucial overhead areas to watch where Supermicro shares could run into selling pressure and also identify key support levels to eye during potential retracements.

Crucial Overhead Areas to Watch

Further buying could see the shares initially test the psychological $70 level. Investors may look to book profits in this region near a trendline that links last year’s February pullback low with the April trough. The location also roughly aligns with a bars pattern continuation price target that takes the stock’s uptrend from mid-November to early December and repositions it from the falling wedge pattern’s lower trendline.

A decisive close above this level could see the shares rally to around $96, a location where the price may face resistance near a series of peaks that formed on the chart between February and July last year.

Key Support Levels to Eye

During potential retracements in Supermicro’s price, investors should initially eye the $50 level. The shares are likely to attract support in this location near the early August swing low, the upper range of a consolidation period in October and the prominent early-December peak.

Finally, a more significant drop could see the shares fall to around $38. Investors may look for entry points at this level near a trendline that connects the September trough with a range of similar price points on the chart through to this month.

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