Slack (WORK) - Get Report stock is rallying on Thursday, up about 3.2% after the company reported earnings on Wednesday after the close.

The San Francisco provider of collaboration software in June priced its IPO at $26. But the stock opened significantly above that mark in its first day of trading, up at $38.50. 

Notably, Slack’s 52-week high came in the same session, after it tagged $42 and promptly retreated.

As you’ll see on the chart below, the stock has been stuck in a painful downtrend since, touching new lows. 

But the sentiment after the release of its fiscal-third-quarter results is more optimistic, as Slack stock looks to form a series of higher lows instead.

The bullish development comes after the company delivered a top- and bottom-line beat, along with an in-line fourth-quarter outlook and better-than-expected full-year forecast.

Management also said it expects to see more migration from Microsoft (MSFT) - Get Report, which has “weak engagement” on its Teams platform.

Traders, though, want to know whether buyers will continue to migrate into the stock and push the share price higher. Let’s look at the charts.

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Trading Slack Stock

Daily chart of Slack stock. 

Daily chart of Slack stock. 

The trend for the 20-day and the 50-day moving averages highlights the struggle that Slack stock has faced over the past six months. So does its downtrend resistance mark (purple line).

In November the tune for Slack stock changed. Just as they did in October, the shares continued to test the $20 level and, in doing so, it continued to find buyers.

Then WORK stock began to trend higher, putting in a series of lower highs ahead of earnings. This formed a short-term uptrend mark (blue line). 

Thursday’s action has been very telling -- and is on the verge of being quite significant.

After initially turning lower on the day, Slack stock rebounded, reclaiming the 20-day moving average and uptrend support in the process. 

Now, bulls are getting close to having some real confidence in the name. That will come if Slack can push through the $23 to $23.50 area, which has been short-term resistance. Above it also puts WORK stock above downtrend resistance and the 50-day moving average.

A close over $23 puts the $26 IPO price on the table.

On a decline, look for a move below uptrend support and the 20-day moving average. Below those marks puts Thursday’s low on the table. If Slack stock declines beyond that, $20 and possibly new lows may be next.