Shares of Super Micro Computer, Inc. (NASDAQ:SMCI) are moving higher Friday. They have soared more than 60% since the beginning of the month.
But the rally may end or pause close to the $40 level. As you can see on the chart, the shares are both overbought and at resistance. These are bearish dynamics, and it’s why Super Micro is the Stock of the Day.
There is a reason why there is resistance around this price. It isn’t a coincidence. This is a price that the shares gapped down from in June.
People who bought back then experienced high levels of buyer’s remorse. The shares didn’t just trend lower after. The next day, they closed down more than 30%.
Some of them have been watching it and regretting it ever since. Now that they have the chance to sell their losing positions at breakeven, they are placing sell orders.
