Shares of Workday (WDAY - Get Report)  were hit Friday, falling 5.5% and closing at $177.28.

The move comes after the company reported its second-quarter earnings results. Workday reported earnings of 44 cents per share, easily beating estimates by 9 cents per share. Revenue of $887.8 million grew 32.2% year-over-year and beat estimates by $15.3 million.

A top- and bottom-line beat wasn't enough to elevate Workday stock, which is perplexing to investors given the rest of its report. Operating margin rose from 10.1% in the same quarter a year ago to 13.2% in the second quarter.

Management guided for third-quarter subscription revenue of $783 million to $785 million, above consensus for $783 million. Management raised its full-year subscription revenue outlook to between $3.06 billion and $3.07 billion, from a prior range of $3.045 billion and $3.06 billion.

Despite the seemingly good results, the reaction to the report hasn't been good, as WDAY, cloud-based company for HR, couldn't follow up Salesforce's (CRM - Get Report) post-earnings rally earlier this month. Let's look at the charts.

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Trading Workday Stock

Daily chart of Workday stock.
Daily chart of Workday stock.

For much of 2019, Workday stock had been trading higher in a rising channel, bouncing between support and resistance (blue lines). At the end of July, though, shares tumbled through the 50-day moving average, finding support at the 200-day moving average.

After rising along this metric for most of the month, support gave way on Friday.

Down over 5.5% for the day, WDAY stock closed below all of its major moving averages, as well as the 38.2% retracement. At current levels, shares are down more than 20% and are technically in bear-market territory.

$175 has been a notable level since December, while the 50% retracement is just below at $172.28. For now, the former is holding as support. While some may feel that Workday stock doesn't deserve to fall, we can only trade the action, not change the narrative.

Should WDAY stock continue to fall, look to see if the 61.8% retracement near $159.40 holds as support. On a rebound, bulls need Workday stock to reclaim $188+. If it can, it will put Workday stock above the 200-day moving average, 38.2% retracement and likely the 20-day moving average. Over $190 and the 50-day moving average is on the table.

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