Super Micro Computer (SMCI) reported good news this morning as the company released the findings of a review by an independent special committee.
The review found no evidence of misconduct on the part of management or the Board of Directors and that Super Micro’s Audit Committee acted independently.
In addition, Super Micro announced that no restatement of reported financials expected.
News of the report sent buyers looking for a potential value into the market to buy the shares feverishly.
Super Micro shares closed Monday’s trading almost 30% higher with volume registering unusually heavy. The heavy trading volume signals that investors appear willing to take the position that Super Micro Computer’s worst news is behind it.
On November 19, SMCI shares saw a similar move in both volume and price. The rally came on the heels of Super Micro’s management announcing that the company had submitted a plan to bring its financial filings up to date to avoid delisting from the NASDAQ exchange.
A delisting would have been the second for the company for the same reason. Super Micro Computer’s first delisting was in August 2018.
Today’s rally moves shares of Super Micro Computer above the $40. The break above this price signals the beginning of a “volatility rally” that will likely target a move to $50.
Shares of Super Micro should see a slowdown in buying as it approaches $50 for two reason.
First, the stock will be registering short-term overbought conditions.
Second, the $50 price holds psychological value as a round-number that will likely cause short-term traders to take profits given the stock’s long-term bear market trend.
Find out more about Super Micro Computer’s story here: Super Micro Computer is Up, But Not in the Clear Yet
