Find the BEST Respected Moving Average Support & Resistance Lines

Super Micro Computer, a Storyboard

When SMCI broke its support, it fell more than 50% until it got caught by its next weekly MA support band. What's next?

We started tracking Super Micro Computer (SMCI) about three months ago, back in mid July. The stock traded at $909.96 and was nicely riding its 27-week EMA support line:

SMCI, rides its 27-week EMA support line, as of Sunday, 14 July 2024, weekly chart

That was the last bullish looking chart for SMCI with the last green candle above the best respected MA support line.

Four weeks after, the chart could only show four red candles and a vicious break below that long term weekly MA support band:

SMCI, far below its broken weekly MA support band, as of Sunday, 11 August 2024, weekly chart

But, where does it go from here? How low is low?

With an updated weekly MA support calculation, a target emerged:

SMCI, overlaid with its very long term weekly MA support band, as of Sunday, 11 August 2024, weekly chart

Super Micro Computer had a very long term weekly MA support band waiting slightly below the $400 mark. The upper band line was composed of the 94-week SMA and the lower band line was composed of the 103-week SMA. These MA lines registered in March and April of 2020, respectively.

August ended with SMCI hitting support and rebounding slightly up:

SMCI, hitting its very long term weekly MA support band, as of end of August 2024, weekly chart

Nice. Now what?

Was this just a ‘kiss and goodbye’ between price and support? Has support checked the box and price will go higher now? Or was the slight rebound a result of a short cover activity, and price will shortly resume downwards?

Hmm… Well, we don’t predict. A support band suggests a potential demand area, however, there are no guarantees. If demand lacks – support may break. It’s all about probabilities.

The following weekly candle revealed the next chapter in SMCI’s storyboard:

SMCI, inside its weekly MA support band, as of Saturday, 7 September 2024, weekly chart

The upper weekly MA line of the support band broke and the stock’s price ended the weekly session inside the band.

Oh-oh.

Are we looking at $300? $200? Sit tight.

SMCI, rebounds off its weekly MA support band, as of Sunday, 15 September 2024, weekly chart

Phew! What a rebound! 18.3% in one week! OK, now SMCI is certainly out of the woods.

Is it?

Back in the band

SMCI, back in its weekly MA support band, as of Sunday, 6 October 2024, weekly chart

Zooming in:

SMCI, back in its weekly MA support band, as of Sunday, 6 October 2024, weekly chart, zoom in

Super Micro Computer’s stock has been trading in and out of its weekly MA support band during the next few weeks.

While the stock respects its support band beneath it, SMCI also respects its 8-week EMA resistance line, which registered in July 2024. The last weekly session ended with the stock’s price locked between these MA walls:

SMCI, caught between its weekly MA support and resistance, weekly chart

Zooming in:

SMCI, caught between its weekly MA support and resistance, weekly chart, zoom in

Where next?

No one knows, however, this is a tight spot that can launch SMCI to either direction. A break below the support band may be brutal. A break above resistance may be brutal as well, for short sellers.

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