Fastly Stock Jumps Higher Tuesday: What's Next?

Fastly Inc. FSLY shares were trading higher Tuesday after the company was granted a U.S. patent titled "load balancing across origin servers."

 Several companies in the broad technology sector are moving higher as investors are anticipating earnings reports out of many major companies this week. The stock was trending throughout the day on social media sites such as StockTwits and Yahoo Finance.

Fastly was up 8.96% at $48.78 Tuesday afternoon.

Fastly Daily Chart Analysis

• The stock looks to be nearing resistance in what technical traders call a falling wedge pattern after being granted the patent.
• The price has been falling lower the past few months while being condensed between narrowing highs and lows. A break of pattern support or resistance may let the stock see a strong move in the same direction as the break.
• The stock trades above the 50-day moving average (green) but below the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may hold as a place of support, while the 200-day moving average may act as an area of resistance.
• The Relative Strength Index (RSI) has been pushing higher the past few days and sits at 69. The RSI is nearing the overbought range where the stock will see much more buying pressure than selling pressure.

See Related: Why Fastly Shares Are Rising

What’s Next For Fastly?

Bullish traders want to see the stock continue to move higher and break above the pattern resistance. A break above resistance with a period of consolidation could let the stock see a strong bullish push. 

Bearish traders are looking to see the stock fall back toward support and eventually be able to cross below the support. Bears are then looking to see the stock cross below the 50-day moving average for sentiment to turn more bearish.