Super Micro Computer (SMCI)

We got a question on SMCI from Cristian.

SMCI remains a stock to watch, currently trading within a developing symmetrical triangle pattern dating back to mid-to-late 2024. Further evidence regarding the direction of the future breakout is likely required as SMCI navigates this pattern.

Bullish case: SMCI shows signs of basing (aka bottoming) above upward turning 26- and 40-week moving averages near 42.81-41.05. While encouraging, we would like to see a push above the 13-week moving average at 47.25 and tactical resistance at 47.80-50.61. This would strengthen the case for a sustained bullish turn in trend, increasing the potential for an upside breakout from the triangle pattern.

Bearish case: If SMCI cannot reclaim 47.80-50.61, we would not rule out a developing bearish head and shoulders pattern. To confirm, SCMI would need to break below 40-39.50 (uptrend line from last November and the pattern neckline). Note that this would also trigger a breakdown from the larger triangle pattern.

Risk management: For bullish positioning, the 40–39.50 area is a critical stop zone. For bearish positioning, the 47.80–50.61 zone remains the level to watch.

Chart 1: Super Micro Computer (SMCI)