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- 1 Super Micro Computer stock price closed at $244.06 while witnessing a loss of 3.81% during the last intraday session.
- 2 SMCI stock price has dived below 20 and 50-day exponential moving averages.
- 3 The year-to-date return of Super Micro Computer stock is 193.77% while one monthly return is -19.32%.
SMCI stock price was in a strong uptrend since the end of April, forming higher lows and rising from the support level of $93. The stock price has been heavily bullish since the start of 2023 amid an artificial spending spree.
Investors were euphoric about artificial intelligence and stocks related to it since the beginning of 2023. The uptrend led to the creation of an all-time high at $357 on August 7th, 2023 but the release of Quarter 4 earnings results has turned out to be the reason for a strong downfall in stock price.
The stock tumbled nearly about 25% on 8th August 2023 after the release of Quarter 4 earnings result. After the meltdown, SMCI stock price formed support at $248.40 and retested the $271 level.
The previous candle broke the recent support of $248.40 and closed below it. If the next candle can break the low, it might head toward the next support level of $214. On the other hand, if bulls take control and push the price above $271, it might rise toward the next resistance level of $256.
Quarterly Result Of Super Micro Computer Induces Bearish Sentiment
The quarterly result was successful in crushing the estimates of earnings per share as well as revenue, even Wallstreet applauded the company’s fourth quarter result and guidance.
Many analysts stated that Super Micro Computer is obviously reaping the reward of the rise in artificial intelligence which has turned the expectation high and raised concerns regarding guidance leading to a fall in stock price. Despite a small pullback, SMCI stock price has tripled since the start of the year.
Will SMCI Stock Continue Falling?
The stock price has negatively crossed the 20 and 50-day exponential moving averages, suggesting a rise in bearish momentum. Chaikin money flow score has dropped to 0.00 indicating neither strength nor weakness in the market.
The relative strength index has also melted down to 37.57, implying bearish momentum in the price. If the downtrend continues, it will soon enter into an oversold zone which would indicate the possibility of the formation of a support level at $214 and chances of short-term pullback.
The bands of Bollinger have started to expand indicating a rise in volatility. SMCI stock price has reached near the lower band of Bollinger signifying the possibility of a pullback.
Conclusion
The market structure and price action of Super Micro Computer stock have turned bearish after the release of the quarterly report. The company forecasted Quarter 1, 2024 adjusted EPS of net revenue of $2.75-$3.50, and the midpoint below the consensus estimate of $3.14 induced bearish sentiment in the market.
Technical Levels
Major support: $214 and $158.50
Major resistance: $271 and $356
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
