ServiceNow, Inc. (NOW) stock rose more than 1% during Wednesday's session, extending its rally throughout the week. Bank of America reiterated its Buy rating on ServiceNow shares and raised its price target from $370.00 to $408.00, calling the stock a top pick given its rising relevance during the COVID-19 crisis. The analyst sees a solidifying path toward $10 billion-plus in long-term revenue as ServiceNow becomes a key business continuity tool that enables remote employees to return to work.

During the first quarter, the company reported revenue that rose 34% to $1.06 billion, beating consensus estimates by $40 million, while earnings per share came in at 24 cents, beating consensus estimates by 15 cents. Subscription revenue rose 34% to $995 million, billings rose 29% to $1.1 billion, and free cash flow rose 30% to $408.6 million.

Wells Fargo also reiterated its Overweight rating and raised its price target on ServiceNow shares form $330.00 to $405.00 following the first quarter financial results in late April. Analyst Philip Winslow said that subscription billings and cash flow reductions wouldn't be as severe as the Street feared and that first quarter results were driven by the closing of several large deals.

Chart showing the share price performance of ServiceNow, Inc. (NOW)
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From a technical standpoint, ServiceNow stock broke out from prior highs of around $360.00 this week. The relative strength index (RSI) remains near overbought levels with a reading of 69.25, but the moving average convergence divergence (MACD) remains in a strong bullish trend after crossing above the zero line. These indicators suggest that the stock could see some consolidation before resuming its move higher.

Traders should watch for consolidation above trendline support levels near $360.00 over the coming sessions. If the stock rebounds higher, traders could see a move toward R1 resistance at $390.66 or R2 resistance at $429.77. If the stock breaks down from those levels, traders could see a move toward the 50-day moving average at $298.73 or the 200-day moving average at $283.82.

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