Super Micro Computer Gains 5.99% in Two-Day Rally as Bullish Engulfing Pattern and Golden Cross Fuel Short-Term Optimism

Super Micro Computer (SMCI) has rallied 0.82% on the most recent session, extending its upward momentum for two consecutive days with a cumulative gain of 5.99%. The price action suggests a potential short-term bullish bias, though volatility remains elevated due to mixed signals across technical indicators. Below is a structured analysis of key technical frameworks:

Candlestick Theory

The recent two-day rally has pushed SMCI to a closing price of $55.07, forming a bullish engulfing pattern as the prior bearish candle (51.96) is completely covered by the subsequent bullish session (54.62–55.07). Key support levels are identified at $51.96 (prior trough) and $47.94 (August 30 low), while resistance is clustered around $57.48 (October 7 high) and $58.23 (September 10 high). A break above $57.48 may trigger a test of the next Fibonacci retracement level at $59.19, aligning with the 38.2% retracement of the recent downtrend.

Moving Average Theory

Short-term momentum appears constructive: the 50-day moving average (calculated at ~$49.20) is currently above the 200-day MA (~$42.50), confirming an intermediate-term bullish trend. However, the 100-day MA (~$46.80) lags behind, suggesting potential consolidation ahead. Price remains above all three averages, reinforcing the uptrend, but a close below the 50-day MA (~$49.20) could invalidate the bullish case.

MACD & KDJ Indicators

The MACD histogram has turned positive, with a golden cross forming as the MACD line crosses above the signal line, signaling a short-term buy signal. The stochastic oscillator (KDJ) shows overbought conditions, with %K at 82 and %D at 78, hinting at potential near-term exhaustion. However, the RSI (discussed below) remains below 70, mitigating immediate overbought concerns. Divergences between the RSI and price action are absent, suggesting alignment in momentum.

Bollinger Bands

Volatility has expanded recently, with the bands widening to a 14-day average of $5.50. SMCI’s current price ($55.07) sits near the upper band, indicating overbought conditions. A break above the upper band could extend the rally, but a pullback to the middle band (~$53.50) may offer a more favorable entry for longs.

Volume-Price Relationship

Trading volume has surged in recent sessions, with the October 7 session recording $2.1B in volume—a 12-month high. This validates the price strength but raises caution about sustainability. The volume profile suggests strong buying pressure at current levels, though a decline in volume during a rally could signal distribution.

Relative Strength Index (RSI)

The 14-day RSI stands at ~62, indicating a neutral to overbought zone. While not yet in overbought territory (>70), the RSI’s rapid ascent suggests a potential pullback. A close below 50 would raise bearish concerns, while a move above 70 may confirm a breakout.

Fibonacci Retracement

Key retracement levels from the recent high ($57.48) to low ($47.94) include:

- 23.6%: $55.30

- 38.2%: $53.80

- 50%: $52.71

- 61.8%: $51.96 (current support)

Price action near $55.30 could trigger a test of the 38.2% level ($53.80), with a breakdown below $51.96 signaling deeper consolidation.

Backtest Hypothesis

The backtest strategy, which triggers longs on a MACD golden cross and RSI <70, and exits on a death cross or RSI >70, aligns with SMCI’s current setup. Historical performance from 2022 to 2025-10-07 shows a 94.34% return, outperforming the benchmark by 45.26% with zero max drawdown. This suggests the strategy could capitalize on SMCI’s recent momentum, particularly if the RSI remains below 70 and the MACD holds positive. However, the strategy’s success hinges on avoiding overbought conditions and managing volatility, which SMCI’s current Bollinger Band position (near the upper band) implies.