However, the stock faded from of its session highs, calling an important level to action. That level is prior resistance between $145 and $148. Bulls are hoping that the recent quarter is enough to keep Coupa stock elevated over this breakout zone moving forward.
Second-quarter earnings of 7 cents per share came in well ahead of analysts' expectations, beating estimates by 18 cents per share. Revenue of $95.14 billion grew 54% year-over-year and beat estimates by almost $10 million. Margins came in stronger than expected, and guidance was vastly ahead of consensus estimates.
Management expects third-quarter sales of $95.5 million to $96.5 million vs. consensus estimates of just $87 million. The earnings outlook landed between 5 cents and 8 cents per share vs. consensus expectations of 6 cents per share.
For the full year, management expects sales in the range of $369 million to $372 million vs. estimates of $345.4 million. For earnings, management expects profit of 11 cents to 16 cents per share vs. estimates of just 9 cents per share.
While that's a lot of numbers to throw at you, it's important because it sets the stage for not just a strong previous quarter or a strong current quarter, but a strong push over the next six months. It's exactly what Coupa stock needed to breakout over resistance.
The question is, can the breakout stick?
Trading Coupa Stock
On the chart above, look at the price action from March and April. Coupa stock was trading in a sideways consolidation before finally pushing through $100 resistance. The $100 level then turned into support moving forward, which is healthy price action.
Fast forward to July and August, and we see similar price action, with $145 to $148 acting as resistance. The post-earnings action is quite bullish for Coupa stock -- and deservedly so.
However, that bullish reaction will lose a lot of its significance should shares fail to close above resistance. On the plus side, Wednesday's midday fade gives buyers a measured risk/reward from current levels.
Should COUP stock close below this $145 to $148 range, bullish traders may consider stopping out of the position. If the breakout zone holds as support, the post-earnings highs are the first upside target, while a continuation higher could be on the table should it get there.
If the breakout zone fails to support Coupa stock, look for a possible test of the 50-day moving average and uptrend support.