Atlassian (TEAM) shares surged in prolonged buying and selling on Thursday after the software program firm issued an upbeat revenue outlook amid strong demand for its artificial intelligence (AI)-powered cloud choices.

The software program maker guided present quarter and full yr income above Wall Road expectations. CFO Joe Binz stated that enterprise gross sales execution drove better-than-expected income throughout the corporate’s cloud and information heart providers, including that Atlassian generated 30% subscription income progress within the fiscal second quarter.

The corporate, which provides prospects a variety of collaboration instruments, together with a just lately launched AI assistant that enables customers to customise enterprise information, has seen its shares leap extra that 40% over the previous three months by means of Thursday’s shut. The inventory rose 20% to $319 in after-hours buying and selling.

Beneath, we take a better have a look at Atlassian’s weekly chart and use technical analysis to determine essential value ranges to be careful for.

Projected Pennant Sample Breakout

Since early December, Atlassian shares have consolidated in a pennant, a chart sample that indicators a continuation of the inventory’s sturdy uptrend that began in August.

Certainly, the inventory is projected to stage a decisive breakout from the pennant in Friday’s buying and selling session after the corporate’s upbeat quarterly report.

It’s additionally value declaring that even earlier than at the moment’s outcomes, the inventory registered its highest weekly volume since early November, suggesting that some bigger market contributors had positioned for the inventory to renew its pattern larger.

Let’s flip to Atlassian’s chart to determine three key overhead areas the place the shares might run into resistance and likewise level out an necessary support level to eye throughout retracements.

Key Overhead Areas to Watch

The primary key overhead space to look at sits at $335, a location the place the shares might face promoting strain close to the December 2021 low and February 2022 excessive.

Additional upside might see the shares climb to the psychological $400 space. Traders who’ve purchased at decrease costs might look to lock in profits at this stage close to the December 2021 countertrend peak.

Shopping for above this stage might propel a transfer to round $460, an space the place the shares might run into resistance slightly below the inventory’s record high, set in October 2021. This area additionally sits slightly below a projected bars sample goal that takes the inventory’s impulsive transfer larger from August to December final yr and overlays it from the pennant sample’s higher trendline, speculating how a bullish continuation transfer might play out.

Essential Assist Degree to Eye

Throughout retracements, traders ought to preserve tabs on the $288 stage. Atlassian shares might encounter help on this space close to the pennant sample’s peak, which additionally intently aligns with the outstanding August 2022 swing high.

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As of the date this text was written, the writer doesn’t personal any of the above securities.