Shares of Spotify (SPOT - Get Report) opened higher on Monday, after the company reported earnings before the bell.

However, that higher open has turned into a loss as we approach midday trading. Spotify stock is down about 2% to $135.35 after the company missed on earnings expectations but beat on revenue estimates.

There has been concern surrounding Spotify as Amazon (AMZN - Get Report) , Apple (AAPL - Get Report) and others continue to press into the music space. In particular, Apple Music continues to gain tremendous ground on its competitors and is now a leader in the streaming music business.

That said, Spotify's premium-subscriber revenue came in stronger than expected, while the midpoint of guidance for next quarter and the full year came in roughly in-line with consensus expectations. That's leaving investors with a mixed feeling in the name, evident by the bouncing price action.

So how do we trade Spotify stock from here?

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Trading Spotify Stock

Weekly chart of Spotify stock.
Weekly chart of Spotify stock.

Spotify stock is teetering on an important support level. Should it give way, shares could be in trouble. In January, Spotify pushed its way back above $132, and on a weekly basis has held that mark for more than three months. At the same time, the stock has been limited by a $145 range resistance.

Admittedly, Spotify stock did push above this level in February, but it could not hold onto that breakout level and fell back into its $132 to $145 range. Without surprise, Spotify opened near $145 resistance on Monday morning after its earnings report as resistance again held it in check.

Now the key is for Spotify stock to hold range support. If this area gives way, I'm not sure where support immediately comes into play. SPOT stock has a very cautious feel to it, with investors seemingly wanting to be in for potential upside, but worry about competitors squeezing Spotify in the future.

On the upside, I would love to see range support hold and for Spotify stock to recapture the 10-week moving average. If it does, that sets up a possible retest of the $145 level. Above $145 and my first upside target would be the 50-week moving average near $152.88. 

Before any of that can take place, though, investors need to know that support will hold. 

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