Shares of Foot Locker  (FL - Get Report) are running higher after the company's better-than-expected fourth-quarter earnings results. Now investors are wondering if the stock can continue its move higher or if the rally will peter out. 

So far, it's the latter, with shares already well off the morning highs. However, it remains to be seen whether this profit-taking compression will continue or if Foot Locker stock will rebound to the highs by the close.

Nutshell: If Foot Locker stock can't maintain a post-earnings rally on these results in this type of market, then it's not worth owning. Watch $58 and the 21-day moving average for support.

Let's see how the charts are shaping up for Foot Locker.

Trading Foot Locker Stock

Two-year daily chart of Foot Locker
Two-year daily chart of Foot Locker

Shares of Foot Locker opened at $67.85, tip-toed a bit higher to $68 and reversed lower. The stock closed up about 6% to $63.07, but the action is certainly discouraging for the bulls. That said, at its highs today the stock was up almost 50% from its December lows. Some profit taking should be expected.

The question now becomes, is the profit taking a short-term action and we'll see Foot Locker stock bid back up or will shares drift lower and mark the end of its multi-month run?

The outcome isn't clear and Friday's action is both encouraging and discouraging at the same time. Seeing shares pullback so aggressively is disappointing, but still up 5% is solid.

Foot Locker stock technically filled the gap all the way from May 2017, a necessary move for the stock to relieve long-time investors who have been long this name. At the same time, the stock is still above $58, a big-time resistance level it overtook last month and stayed above going into earnings.

At the very least, Foot Locker needs to stay above this mark. It would be more encouraging,  though, if FL stock is able to get back above $67 and maintain those levels going forward. With the momentum we're seeing in Nike (NKE - Get Report) , Under Armour (UA - Get Report) (UAA - Get Report)  and others, it shouldn't be out of the realm of possibility.

Plus, the quarter was pretty solid. Comparable-store sales grew 9.7% in the quarter, gross margin expanded 100 basis points to 32.4% and operating margin expanded by a whopping 620 basis points to 9.2%. Guidance was solid and let's not forget, the company beat on earnings and revenue expectations, the latter of which grew 2.7% year-over-year (4.2% ex-currency) despite the company reducing its store count by 89 locations.

Worth repeating: If Foot Locker stock can't maintain a post-earnings rally on these results in this type of market, then it's not worth owning. Watch $58 and the 21-day moving average for support. 

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