Adobe Systems Incorporated (ADBE​) shares rose more than 12% on Thursday after its Analysts' Day event on Wednesday. Adobe reiterated its fourth quarter guidance, and several analysts raised their ratings and price targets on the digital media company, citing strong pricing power in a rapidly growing industry. The company's plans to raise prices in March could help boost its operating margins and enhance its long-term profitability.

Cowen & Co. raised its price target on Adobe shares to $185.00 with an Outperform rating; Jefferies raised its price target to $190.00 with a Buy rating; and Piper Jaffray raised its price target to $195.00 with an Overweight rating. With the stock trading at around $170.00, these price targets represent an 8.8% to 14.7% premium to the current market price. The company has also consistently beat top- and bottom-line earnings estimates over the past couple of years. (See also: It Should Be FAAANG, Not FANG: BofAML.)

Technical chart showing the performance of Adobe Systems Incorporated (ADBE) stock

From a technical standpoint, the stock broke down from trendline support in late September but rallied higher through early October. The stock then broke out from its 50-day moving average and trendline resistance to new all-time highs. The relative strength index (RSI) appears overbought at 79.16, but the moving average convergence divergence (MACD) experienced a strong bullish uptrend suggesting a long-term move higher.

Traders should watch for a period of consolidation following Thursday's big move higher, especially given the lofty RSI readings, with major support at upper trendline and R2 support at $164.28. If the stock breaks down from these levels, it could move toward trendline and R1 resistance at $156.73, but barring any major fundamental changes, the stock is likely to continue its rally higher after a period of consolidation. (For more, see: Why Adobe's Investors Are Dancing on Cloud 9.)

Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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