GrubHub Inc. (GRUB) shares rose nearly 30% on Thursday after the company reported positive fourth quarter financial results. Revenue rose 49.2% to $205.08 million – beating consensus estimates by $3.34 million – and net income of $0.37 per share beat consensus estimates by six cents per share. Active diners increased 77% year over year, and gross food sales rose 39% to $1.1 billion over the prior year.

In addition to the financial results, GrubHub and Yum! Brands, Inc. (YUM) announced a new partnership aimed at driving incremental sales to KFC and Taco Bell restaurants in the United States through online ordering for pickup and delivery. In conjunction with the agreement, Yum! Brands agreed to purchase $200 million worth of shares to provide GrubHub with additional liquidity to accelerate the expansion of its domestic delivery network. (See also: Grubhub Posts Strong Fourth Quarter Results.)

Technical chart showing the performance of GrubHub Inc. (GRUB) stock

From a technical standpoint, the stock broke out from upper trendline and R2 resistance at around $83.88 on Thursday to fresh all-time highs. The stock moved nearly 8% lower on Friday following the news, potentially breaking down from key support levels. The relative strength index (RSI) moderated to 62.37, but the moving average convergence divergence (MACD) remains in a bullish uptrend following Thursday's rally.

Traders should watch for the stock to close above R2 resistance at $83.88 on Friday and then make a renewed push higher next week. If the stock breaks down from these levels, traders should watch for support around R1 support at $78.06 or the pivot point, lower trendline and 50-day moving average support levels at around $71.41. The volume on Friday's down day remains muted, which is a good sign for bulls in the stock. (For more, see: Grubhub Can Outpace Uber and Amazon: Analyst .)

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

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