Shares of DocuSign (DOCU) - Get Report are erupting higher on Friday, climbing 19% to $54.90 in midday trading.

The rally comes on better-than-expected earnings and if the rally continues, new 2019 highs are not out of the question.

The company reported earnings of 1 cent per share, missing expectations by 3 cents per share. However, revenue of $235.6 million grew 41% year over year and topped estimates by almost $15 million.

More importantly, though, guidance for the upcoming third quarter and the full year both beat consensus expectations. Management expects Q3 sales in the range of $237 million to $241 million vs. expectations of $231.9 million. Their full-year outlook calls for revenue in the range of $947 million to $951 million, vastly ahead of analysts' expectations of $920.4 million.

That's why shares are rallying with so much force on the day, even though earnings came up short. Investors care about growth in cases like DocuSign, and when future expectations are this far ahead of Wall Street consensus, we generally see big moves to the upside.

The question now is, can DocuSign stock continue higher from here or have investors missed the move?

Trading DocuSign Stock

Daily chart of DocuSign stock.

Admittedly, it's tough to buy a stock that's already moved almost 20%. With DocuSign stock, though, we can measure the levels.

Prior to reporting earnings, DOCU stock reclaimed the $46 level and 20-day moving average. This set up the bullish gap-up investors are seeing on Friday, with shares erupting over the 50-day and 200-day moving averages, as well as the 38.2% retracement.

All of these marks are near $50, making it a significant level should DocuSign embark on a significant fade from here.

Before getting there, though, there's an important trend-line in place (blue line). This mark has followed DOCU stock's trend of lower highs, which has pressured shares lower throughout 2019. A pullback to this mark that holds as support could mark a change in tone and give those who missed DocuSign's ~20% post-earnings rally another chance to get long the stock with a reasonable risk/reward setup.

That's vastly superior to the buy-and-'hope' strategy.

On the upside, over ~$56 puts Friday's high of $57.30 on the table. Above that and $59 is a possibility as well. Over all of these levels puts that pesky $65 level on the map. 

As usual, investors should let price guide them on whether they are buying a possible breakout/continuation or a pullback. Because the company missed on GAAP and non-GAAP earnings, reported a decline in free cash flow and had a contraction in margins, perhaps that's causing some of Friday's slide from the session highs.

If that weakness continues, a test of prior downtrend resistance may be in the cards. Keep it simple: Below Friday's low and $53 is more likely. Above $56 is good for bulls.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.