Watch These Elastic Stock Price Levels After Post-Earnings Surge

Elastic (ESTC) handily surpassed Wall Street’s earnings expectations and lifted its outlook, sending shares in the enterprise data software company sharply higher on Friday.

The company now sees fiscal 2025 revenue growth of 15%, up from its prior projection in August of 14%, with the boosted outlook driven by continued enterprise demand for the software maker’s generative artificial intelligence (AI) applications and platform consolidation.

Elastic shares were up 15% in early afternoon trading at around $108, narrowing the year-to-date loss to about 4%. Prior to Friday’s gain, the stock has been weighed down this year by segmentation changes that led to a lower number of customer contracts.

Below, we take a closer look at Elastic’s chart and use technical analysis to identify key post-earnings price levels worth watching out for.

Descending Channel Breakout

Elastic shares traded within an eight-month descending channel before breaking out above the pattern’s upper trendline on Thursday ahead of the company’s quarterly results. Importantly, the move higher occurred on the highest trading volume since late August, indicating that some market participants had positioned for a better-than-expected earnings report.

Friday’s earnings-driven jump adds to the stock’s recent bullish price momentum, but also triggers a heavily overbought relative strength index (RSI) reading, which could lead to near-term profit taking.

Let’s identify two key overhead areas on Elastic’s chart that investors may be watching and also point out major support levels to monitor during retracements.

Key Overhead Areas to Watch

The first overhead level to watch sits around $118. This area will likely attract significant attention, given its proximity to multiple swing highs that formed on the chart between December 2023 and July this year.

A convincing close above this level could act as a catalyst for a move up to the $133 region, a chart location where investors may look for exit points near a range of trading levels situated just below the stock’s 2024 high.

Major Support Levels to Watch

During pullbacks, investors should monitor how the stock’s price responds to the $94 level. An area that could encounter support near two prominent troughs that formed near the 200-day moving average (MA) in April and May.

Finally, selling below this level could see the shares revisit lower support near $82. This area, which currently sits just above the 50-day MA, may see buying interest near the upper range of a consolidation period that formed on the chart throughout September and October last year.

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As of the date this article was written, the author does not own any of the above securities.