Weibo Corporation (WB) soared more than 20% by mid-day Tuesday after reporting better-than-expected first quarter financial results. Revenues jumped 67% to $199.2 million – beating consensus estimates by $12.35 million – while earnings came in at $0.26 per share – beating consensus estimates by $0.05 per share. The company also issued second quarter revenue guidance of $240 million to $250 million, which was well-above the $229.4 million consensus.

Weibo also reported solid growth in its user base. Monthly active users (MAUs) reached 340 million in March 2017, which represents a 30% increase from a year ago, while average daily users jumped 28% to 154 million. The company monetizes these users by primarily targeting small and medium-sized enterprises that wish to advertise on its platform, which continues to grow and reaches a primarily mobile audience at over 90% of users.

Since its spin-off in April 2014, the Chinese social media giant has seen its shares appreciate more than 280%. This performance has also boosted its former parent companies – SINA Corporation (SINA) – which saw its shares jump nearly 20% by Tuesday mid-day. Alibaba Group (BABA) also holds a large stake in the company that it purchased from SINA Corporation several years ago, but due to its size, the stock jumped only about 2% on the news.

On a technical level, the stock broke out from an ascending triangle pattern and R2 resistance at $62.70 to reach new all-time highs. Traders should watch for some consolidation above R2 resistance-turned-support before a further rally higher. After all, technical indicators suggest that the stock may be in overbought territory with a relative strength index (RSI) reading of 92.89 – although the moving average convergence-divergence (MACD) remains bullish.

Traders may want to exercise caution before purchasing the stock at these overbought levels, but a period of consolidation could set the stage for an ongoing move higher.

Charts courtesy of Author holds no position in the stock(s) mentioned except through passively-managed index funds.

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