• Supermicro shares gained ground in premarket trading on Monday after rising nearly 80% last week, as the embattled server maker rebounded from a turbulent stretch.

• The recent gains follow the filing of a compliance plan last Monday to avoid a potential Nasdaq delisting, as well as a mention from partner and AI favorite Nvidia in the chipmaker’s earnings call on Wednesday.

• Supermicro shares broke down below support earlier this month before promptly reversing direction to create a potential bear trap.

• The relative strength index has crossed above 50 to confirm improving momentum, but sits below overbought territory, giving the price ample room to test higher prices.

• Investors should monitor important resistance areas on Supermicro’s chart around $39, $50, and $64, while also watching a key support level near $23.

Super Micro Computer (SMCI) shares gained ground in premarket trading on Monday after rising nearly 80% last week, as the embattled server maker rebounded from a turbulent stretch.

The recent gains follow the filing of a compliance plan last Monday to avoid a potential Nasdaq delisting, as well as a mention from partner and AI favorite Nvidia (NVDA) in the chipmaker’s earnings call on Wednesday.

Even after last week’s surge which saw the shares record their best five day return on record, the stock still trades more than 70% below its March peak. The stock had slumped in the wake of several accounting and corporate governance issues that, in part, led to the resignation of the company’s auditor and delayed filing of several financial reports.

The stock was up 7% at $35.50 in recent premarket trading.

Below, we take a closer look at Supermicro’s chart and use technical analysis to identify important price levels worth watching.

Supermicro shares broke down below support earlier this month before promptly reversing direction to reclaim the key technical level. Such a move creates a potential bear trap, a chart event that lures investors into selling or opening a short position before the market rebounds to cause a loss.

It’s also worth pointing out that above-average trading volume has backed the stock’s recent recovery, indicating strong buying conviction. Moreover, the relative strength index (RSI) has crossed above 50 to confirm improving momentum, but sits below overbought territory, giving the price ample room to test higher prices.

Looking ahead, let’s identify three important resistance areas on Supermicro’s chart to monitor if the stock continues its move higher and also call out an important support level to watch during retracements.

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