Yesterday, the S&P 500 (tracked as US SPX 500 mini on FXOpen) hit another record high for the year, with Super Micro Computer (SMCI) leading the charge. SMCI shares soared by 28.50% during the session.

SMCI has been highly volatile this year. In the first 2.5 months, its stock price skyrocketed over 300%, breaking the psychological $100-per-share mark, fueled by the AI boom.

However, this rally was followed by a period of consolidation and then a sharp downtrend, partly driven by accounting concerns. According to Investing, the company failed to file its 10-K form for the fiscal year 2024 due to accounting issues, leading Nasdaq to threaten delisting. Meanwhile, Ernst & Young (EY), the company’s auditor, announced it was unwilling to associate itself with the financial statements prepared by Super Micro Computer’s management.

As a result, SMCI shares dropped below $20 earlier this month. Fortunately for shareholders, it was revealed yesterday that:
→ No errors were found in Super Micro Computer's financial reports.
→ The company will not need to amend its previously filed reports.
→ The CFO will be replaced.

These developments sparked bullish momentum, propelling the stock from Friday’s closing price of $32.50 to yesterday’s close of $41.91.

Technical Analysis of SMCI Shares

Since 2022, the stock's wide price swings have formed an ascending channel (marked in blue). Key observations include:
→ The consolidation from late August to late November suggests the median of this channel is an equilibrium zone for supply and demand.
→ A mid-November bounce off the channel’s lower boundary (indicated by an arrow).

Will SMCI Continue Its Rally?

This week’s strong momentum may sustain further gains, potentially enabling bulls to break above the resistance line (uppermost of the three red lines) and push towards the median of the blue channel before the holiday season begins.

According to TipRanks:
→ Only 2 of 9 analysts recommend buying SMCI shares.
→ The average 12-month price target for SMCI is $38. However, these forecasts may be revised upwards in light of the latest positive news.

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