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SMCI stock flashes ‘overbought’ as RSI hits all-time high

SMCI stock flashes ‘overbought’ as RSI hits all-time high
Ana Zirojevic

With the shares of Super Micro Computer Inc. (NASDAQ: SMCI) reaching their record high, a technical analysis (TA) indicator has flashed a signal that might flip the positive trend, suggesting a possible sell-off might be on the horizon for the semiconductor stock.

As it happens, it isn’t just the price of SMCI stock that has hit an all-time high (ATH), but also its 14-day relative strength index (RSI), which currently stands at 95.64, according to chart pattern observations shared by stock market analyst Barchart in an X post on February 15.

Indeed, the popular momentum oscillator that measures the speed and change of price movements to assess overvalued or undervalued conditions in an asset’s price has this way got very close to the upper limit of 100, demonstrating strong overbought trend for SMCI.

SMCI price action analysis. Source: Barchart

As a rule of thumb (but with possible exceptions), an RSI reading above 70 for an asset indicates an overbought situation and therefore represents a bearish signal, whereas a reading below 30 suggests oversold conditions and is, therefore, a bullish sign for the asset.

SMCI price analysis

Meanwhile, the price of SMCI stock at press time stood at $880.55, recording a 6.13% advance in pre-market on the day, while increasing 31.43% across the previous week and gaining a whopping 169.85% in the past month alone, as per the recent data retrieved by Finbold on February 15.

SMCI price chart. Source: Google Finance

Despite the recent surge, some analysts believe that SMCI stock may be approaching its peak and could potentially reverse its upward trajectory, moving in the opposite direction.

This perspective comes even as we edge closer to the four-digit mark, following Bank of America’s upgrade to a “buy” rating with a price target of $1,040 and a pre-market increase of +6.15%.

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