DocuSign, Inc. (DOCU) shares rose nearly 20% during Friday's session after the company posted better-than-expected second quarter financial results.

Revenue rose 41% to $235.6 million, beating consensus estimates by $14.79 million, but non-GAAP earnings are in at one cent per share, missing consensus estimates by 13 cents per share. In more positive news, management believes that the third quarter and full-year revenue will look a lot better, with expectations of $237 million to $241 million for the quarter, versus a $231.9 million consensus, and $947 million to $951 million for the year, versus a $920.39 million consensus.

Wedbush analyst Daniel Ives upgraded DocuSign stock from Neutral to Outperform and raised his price target from $48 to $65, saying that the company has returned to its typical "beat and raise" story following a difficult quarter. The analyst believes that the results demonstrate strength as the go-to vendor for its proprietary solution and that up-selling momentum continues to drive revenue with notable new product launches. Other analysts expressed similar thoughts on the stock following the results.

Chart showing the share price performance of DocuSign, Inc. (DOCU)

From a technical standpoint, the stock broke out from its 50- and 200-day moving averages and prior reaction highs during the session. The relative strength index (RSI) soared to overbought levels of 72.48, but the moving average convergence divergence (MACD) moved closer toward the zero line. These indicators suggest that the stock could see some consolidation before continuing its bullish move higher.

Traders should watch for some consolidation above prior reaction highs of around $54.00 over the coming sessions. If the stock breaks down from these levels, shares could retest the 200-day moving average at $49.86 or the 50-day moving average at $49.08. If the stock rebounds higher, the next key resistance to watch is R2 resistance at $57.48, which prices briefly hit during Friday's session.

The author holds no position in the stock(s) mentioned except through passively managed index funds.