Even before futures markets went from a notable decline to a slight gain, shares of Stitch Fix (SFIX) - Get Report were sporting lofty gains in premarket trading.

The stock opened higher by 8.5% and rallied on optimism from the company’s latest earnings report.

Prior to Tuesday’s action, shares actually broke out over resistance on Monday. Because the move happened in a session where Stitch Fix would report its quarterly figures after the close, many were apprehensive to trust the move though.

After all, a negative reaction to the report would likely negate the breakout and could cause traders significant losses. The post-earnings rally makes the trade more interesting now as we begin to map some upside levels.

Stitch Fix stock has been a highly volatile name, with multiple swings of 40% both up and down over the past 12 months. Investors are now wondering if the next big swing will be to the upside following the company’s top- and bottom-line earnings beats.

It’s precisely why Real Money chose Stitch Fix as its Stock of the Day. Let’s have a closer look at the charts.

Trading Stitch Fix Stock

Daily chart of Stitch Fix stock.

Daily chart of Stitch Fix stock.

As you can see on the daily chart above, Stitch Fix stock broke out over $24 resistance on Monday ahead of its earnings release. It even closed above the 200-day moving average.

On Tuesday, shares opened above the 50% retracement near $26.90, and was eventually met by sellers after rallying north of $28. From here, the setup is actually pretty simple.

Over Tuesday’s high at $28.45 and the next upside target is the 61.8% retracement at $29.44. Bulls will want to see the 50% retracement hold as support. That’s especially true given the company’s earnings and sales beat, along with a solid full-year outlook.

Should the 50% retracement fail as support, bulls will want to see the 200-day moving average hold as support. Below that and the $24 breakout mark will need to hold. Investors will have good reason to worry should $24 fail as support in the near- to intermediate-term.

After Stitch Fix’s breakout and post-earnings jump, this level should not be in the discussion anytime soon. Therefore, if it is, it’s likely a problem.

Here’s the bottom line: Look for a move over Tuesday’s high on the upside, and for support from 50% retracement on the downside.